Segmentation analysis

By dividing the market of Danish entrepreneurs into smaller groups of similar needs and characteristics, ICDK will have a clearer overview of how they should position themselves and their services in the most optimal way to achieve their objectives and goals. Segmentation is therefore important according to Freytag & Clarke because “It normally would be impossible to have a close relationship with every customer, so strategic decisions need to be made concerning with whom, how close, when, and for what purpose the relationships will be” (2001, 476). The following macro-level segmentation analysis is based upon Hollensen’s five factors for effective segmentation;

adequate size, measurability, accessibility, responsiveness, compatibility (2010, 287).

In terms of adequate size, the entrepreneurial ecosystem in Denmark has grown considerably over the past 5-10 years and it has become more popular and easy to be an entrepreneur. Since Denmark is an innovation-driven economy, they are also dependent on generating national growth through innovation and knowledge-creation and in fostering large scale businesses. The Danish Government aims to foster such entrepreneurs by making advantageous policy and support for them. Hence, Denmark is also more depending on frontier entrepreneurs to create a society that is in continuous development and characterized by the production of innovative and highly advanced products/services in an international scale (Brandtoft, 02:33; Porter et al, 2002, 17).

Denmark is globally known for its high level of research quality and ability to generate new knowledge and solutions, especially within environmental sustainability, green energy, life-science, medicine and pharma as well as education technology (ICDK, 2015, 6-7+ 11). Denmark is especially acknowledged within cross-border collaboration between researchers and businesses, as it is known to increase the quality (ICDK, 2015, 7).

The Danish Government has invested a lot of money (3.1 % of gross domestic GDP) into Danish research and development to generate innovative growth. Also, Danish universities and science communities have also contributed to the development of the ecosystem by establishing innovation labs for entrepreneurs within research and development (Olesen, 21:22).

Favourable policies, support systems and positive media attention are arguably also part of generating higher acceptance, interest and willingness to become an entrepreneur. So, since entrepreneurship is becoming increasingly popular, there are also an increasing number of entrepreneurs within the segments relevant to ICDK.

Regarding measurability, there are numerous different networks, communities, cluster and places

that could host entrepreneurs within relevant R&D sectors, according to inno-overblik.dk. However,

an actual measurability of the market requires more in-depth investigation. ICDK must conduct

48

further research to find the most relevant places, network, science parks, university innovation hubs etc. to evaluate where it makes sense to promote themselves.

The Entrepreneurial ecosystem in Denmark is generally very open-minded and accessible. It is defined by networking and knowledge-sparring. In terms of responsiveness, the Danish entrepreneurs have a lot of opportunities related to support services, which may make them accustomed to many different offers and high quality. Consequently it is important that ICDK position themselves specifically aimed after their interests and needs and continuously adjust their services after that.

At the moment, it appears that ICDK has an overall positive image, however has a very broad and non-defined customer segment, and as a consequence risks to lose focus and not be perceived as the specialised entity they aim for (Jensen et al, 2015). This is evident due to the fact that several entrepreneurs have a problem of distinguishing ICDK from the Trade Council (TC), and they are often referred to as the same. Also, by spending time and resources on helping a entrepreneurs, who are outside of their scope, they risk to waste resources and perhaps do not have the capabilities required.

This confusion does make sense, since the TC and ICDK share office in Shanghai, they offer very

similar services and are both assisting Danish businesses in going to China. Furthermore, they are

a sort of sister institutions, who are both working under the UM as a part of the political objective to

act as the entrypoint and value adding partner for the Danish public. What distinguishes ICDK from

the TC is that ICDK works as a collaboration between the UM and UFM, while the TC is only a part

of the UM. This means that ICDK’s primary focus is towards activities that have an innovative,

research- and development, educational and/or knowledge creating orientation. That is not TC’s

purpose, since they focus their services primarily to Danish businesses within commercialisation and

consumer market opportunities in China.

49

Based upon the above, the overall segment is the Danish entrepreneurs, in which ICDK is currently assisting two broad segments. The first consists of sector specific entrepreneurs within clean-tech, life-science, ICT as well as higher education and science. This segment has two primary sub segments being (Illustrated in model 1):

•

A. Entrepreneurs within research, technology and development, innovative knowledge-creating solutions, that are looking for further development of their product, service or solution.

•

B. Entrepreneurs with a commercial product/service that are relevant to become a remedy for China’s challenges within related mentioned sectors.

The second segment is defined by entrepreneurs, who are merely looking for business opportunities in the Chinese market outside of ICDK’s mentioned sectors. They also consist of two sub segments:

•

C. Entrepreneurs within manufacturing/production businesses.

•

D. Entrepreneurs, who sell consumer goods/services.

To differentiate themselves from TC and other directly related competitors, ICDK must target a more

narrowly defined and specific group within the overall entrepreneurial ecosystem in Denmark. By

defining a specific target group, ICDK have the ability to position themselves in a clear, coherent and

well-balanced way. This is also a way to provide a stronger basis to argue for their relevance and

existence in the market as well as develop their services to better fit the targeted entrepreneurs. It

will also make it easier in terms of promotion activities that they know who they are specifically aiming

to reach. Lastly, it also allows a closer relationship to develop and exist, since targeted entrepreneurs

arguably will match ICDK’s capabilities and purpose better. This enable an assessment of the

50

compatibility between ICDK, their services in the “Partnership Model” and the targeted Danish

entrepreneurs (Hollensen, 2010, 287; Freytag & Clarke, 2001, 477).