Group number: 10Class mec13yfDate: 04/11/2013

Group members:George DulvaraKatarzyna Klimanska

Carlo GuerraMadalina Manole

Claus Hansen

Project 2Firm: BertoniMarket: GermanyTitle of the project: Bertoni in BerlinTotal number of characters (the body of the report): 34,918

Signatures of the group members:

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Table of Contents1. Introduction3Motivation3Research question3Sub-questions3Interpretation3Scope4Methodology4i. Project type4ii. Theories and models used4iii. Data collection4iv. Structure5v. Criticism of sources and methodology52. Market selection5Course-grained screening the BERI Model5Fine grained-screening Market attractiveness6Fine grained-screening Competitive strengths93. Segmentation, Targeting, Positioning10Segmentation10Targeting11Positioning124. Choice of entry mode13Internal factors13External factors13Desired mode characteristics14Transaction-specific factors15Choice of entry mode155. Culture analysis166. Conclusion17

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1. IntroductionMotivationBertoni A/S is a designer, manufacturer and seller of commercial mens fashion garments, founded in 1972 in Arhus, Denmark. Bertonis mission is to make an honest product of good quality and fit, with ambition to offer all garments at an attractive price level.[footnoteRef:1] With its long tradition in making a wide range of mens clothes - from leisure time suits to formal suits, high-end materials and Scandinavian heritage, Bertoni successfully operates in three different countries - Denmark, Norway and Ireland.[footnoteRef:2] [1: Bertoni (2013), About Bertoni, 04.09.2013; (http://www.bertoni.dk/about/)] [2: Bertoni (2013), Bertoni Stores, 04.09.2013; (http://www.bertoni.dk/stores/)]

Our choice fell on Bertoni A/S because we find that the company meets all the project criteria - it is a Danish based, medium sized but constantly developing company offering innovating textile products that combine traditional Scandinavian values with modern design, making Bertoni a tough potential competitor in the German market and a precious sample for an Internationalization project.From Bertonis point of view, the relatively small size of the Danish market and the consequently high risk of market saturation make internationalization one of the few options to keep profitability and grow. Because of both its size and its closeness to Denmark, the German market represents a reasonable target for Bertoni.This project analyzes German consumers buying behavior and the attractiveness of German market for potential entrants, but also deals the companys options and readiness to approach international markets.

Research questionHow can Bertoni successfully enter the German market in the short run?Sub-questionsWhat is Bertoni's target nowadays?Is there a significant segment that Bertoni can target in the German market?Is the German market attractive for Bertoni?With which entry mode can Bertoni best approach the German market?What cultural elements must Bertoni take in consideration when establishing business relationships with German partners?InterpretationBy successfully we mean Bertoni's ability to make profit at least 10% of profits generating in Denmark from the activities in the foreign market.By enter we the establishment of any activity in the foreign market by means of one or more of the classical hierarchical, intermediate or export entry modes.By short run we refer to a time limit of one to two years.By target we refer to the selection of customers whose needs Bertoni plans to serve, based on specific segmentation criteria.By significant segment we indicate a measurable, differentiable and substantial group of customers that can be profiled enough to constitute a target group, and that can generate relevant income for Bertoni.By attractive market we understand a profitable market based on the result of a course- and fine-grained market screening.As aforementioned, the German market is referred to as the customer base served by the textile industry in Germany.

ScopeEven though other potential markets have been considered, most of our analysis is limited to the German market. For practical reasons, our field research is delimited to the area of Berlin.As our aim is to develop an entry strategy, no specific analysis for the Marketing mix has been performed.

Methodologyi. Project typeThe project analyzes the attractiveness of the German market with respect to a potential entry of Bertoni A/S. It is based on a consumer behavior analysis, directed to the advisory board in order to provide an overview of the most relevant issues that stand out in the market, and strategies that can be applied.ii. Theories and models usedField research and analysis tools are combined to answer the research question.The models of STP analysis are used to identify potential target groups for Bertoni. First segmentation criteria and variables are defined. Field research is used to evaluate sizes and profitability of the different segments, and the effectiveness of the specific segmentation criteria employed. Potential targeting strategies are described and profiled.The funnel model is used to perform a market selection between the markets of Poland, United Kingdom and Germany. Market attractiveness and company strengths are analyzed through a fine-grained screening.For the choice of entry mode, the strategy rule model is used, as designed by S. Hollensen.Hofstede's model of dimensions for cultural distance at a national level is employed to evaluate the main problems Bertoni could face when dealing with German partners.iii. Data collectionIn order to verify the assumptions deriving from desk research, field research has been performed.A survey has been developed to be used in a hall test. Research has been exploratory and descriptive, mainly intended to analyze the characteristics of customers in order to identify market segments.For this purpose, a quantitative survey, aimed at getting a representative overview of the actual composition of the market, has been proposed to men of different ages in different areas of Berlin.Our team had the goal to collect a minimum of 100 successful interviews as personal interviews allows us to interact with respondents and analyze their behavior and reactions while questioning them about their opinions on Bertoni. iv. StructureThe project is structured in sections reflecting our logic presented in the theories paragraph.It starts with a market selection procedure, which deals with course-grain screening three different markets and with evaluating the resulting German market in terms of market attractiveness, also in consideration of Bertoni's competitive strengths. An analysis of segmentation criteria Bertoni likely uses to identify its target groups follows. Market research has been employed for this purpose, and a report is thus included in the STP section. A section on choice of entry mode follows. Finally, details on culture are analyzed. Conclusions and recommendations close the project itself.The project is accompanied by appendixes reporting the analysis performed in order to extract data for the STP and the Internationalization models, and additional information on our field research.v. Criticism of sources and methodologySince Bertoni is a medium sized company, the information flow is not large, and its reports are not public, thus it has been difficult to have access to financial data. Additional information could have been sourced from the company itself through interviews or other forms of internal research.In normal circumstances, it would have also been useful to perform a fine-grain screening of the UK market, whose score at the end of the course-grain screening is not extremely different from the one for Germany. It was however possible to exclude the UK market due a clear expression of intention of the management, that is not really interested in the UK market at the moment.Even though the initial goal of 100 surveys has been almost reached, the relatively small amount of data might not provide the most accurate account on buying behavior. This would however have most probably been the case with even 200 or 300 surveys.

2. Market selectionCourse-grained screening the BERI ModelIn order to select a target market for Bertoni, several segmentation variables have been analyzed. Each has been weighted basing on the different relevance it plays in relationship to Bertonis specific characteristics as a company.

Our first and most important criterion is unemployment rate, as Bertonis products are not only aimed at people with medium to high income, but are also mostly meant for use in a working environment. It is to notice that the latest news indicate that Germanys unemployment rate reached the English one. For the purpose of this analysis, however, data from July 2013 have been used.[footnoteRef:3] [3: Harmonized unemployment rate by gender. Eurostat. Acc. 02/10/2013.]

Efficient transport infrastructure is very important as the companys strategy doesn't focus on a capillary presence of brand shops, while the Internet is often a primary distribution channel in the selected markets.Taxes are highly relevant because they represent the level of attractiveness of a market with reference to establishing a new business, exporting, trading and purchasing products. Corporate tax, personal tax and VAT have been evaluated. As all the selected markets are part of the EU, no import tax comes into consideration.A good level of propensity to spend is also required, as Bertoni sells leisure products, and its turnover can be severely influenced by a tendency to re-use older products rather than buy new.Annual disposable income, PPP and GINI indexes are very useful to estimate the size of Bertoni's target group and its buying power.Inflation is useful both to measure the spending power of consumers and the level of real earnings that the market can offer to Bertoni.Finally, GDP per capita allows evaluating the level of spending an average citizen can afford, while hinting at how much the market could possibly expand. It has the smallest relevance among our selection criteria because this index only indirectly affects Bertonis sales, and it only confirms the tendency the other variables already indicated.This preliminary screening allows us to select Germany as the most appropriate market for Bertonis process of internationalization. In fact, it scores positively for all of the selection criteria and represents an attractive market with reference to the most relevant ones.Fine grained-screening Market attractivenessMarket sizeThe German clothing industry is the second largest consumer industry, only excelled by the food and beverage industry. The turnover amounted to 19.2 billion in 2008, with textile production accounting for approximately 58%, and clothing for 42% of the total.[footnoteRef:4] [4: J.Hauser (2010): Export Marketing Survey: German Market for Textile and Clothing]

Market growthThe market for clothing is becoming more mature and saturated, with abundance of producers and retailers offering fashionable clothes.[footnoteRef:5] Nonetheless, it has shown a steady growth rate through the whole 2007-2012 period,[footnoteRef:6] above 2% from 2010 to 2012. [5: Ibid] [6: Euromonitor International . APPAREL IN GERMANY . September 2013 . p. 6.]

Buying powerGermany is the largest clothing and outwear market in the EU with a total consumption of about 51 billion in 2009. Thus Germany accounted for 19% of the total EU clothing and outerwear market, worth 268 billion .[footnoteRef:7] [7: Ibid]

The trend towards casual clothing found expression in mens wear in the form of jeans, cotton trousers and outdoor jackets. Suits for young men were also in demand in the fashion sector.[footnoteRef:8] [8: Ibid]

The mens wear market is expected to become the most dynamic, driven by the increasing number of men who are fashion conscious.[footnoteRef:9] [9: Ibid]

Competitiveness intensityThe competition in the apparel market segment is really intense considering the market share that some of the most powerful and popular brands have in Germany and the extremely high numbers of competitors. The giant H&M occupies the first place with 5.1% market share in 2012, followed by C&A with 2.5%, Deichmann with 2.3% and Esprit with 1.7%.In-detail government regulationMarket access requirements are set by the EU and national government (legislative requirements), and by the trading partner (non-legislative requirements). With regard to outerwear these requirements refer to environment, consumer health and safety, as well as to social concerns. There is no quality standard for clothing. The legislative mandatory requirements for Germany are set in the:

Geographical distanceIt is impossible not to mention the proximity of Denmark. The successful establishment of Bertoni in Norway and Ireland implies that the company is well capable of dealing with the problems that communicating and selling to a foreign country implies. The closeness between Denmark and Germany actually offers gives Bertoni an even wider range of entry modes.Psychic distanceEven though some cultural elements of difference can be spotted and have to be dealt with (see also section 5), the overall low psychic distance between Denmark and Germany makes the level of market uncertainty quite low.Access to distribution channelsOn the German market there is a wide range of easily available distribution channels.Proper distributors and agents can be found through many state governed and private trade support organizations. Also participation in trade fairs and exhibitions is an important and widely used distribution channel in Germany.Catalogues account for 55% of the distribution in Germany.[footnoteRef:10] Companies have access to special online platforms for distributing their own catalogues. [10: http://www.katalog-mix.de/]

Fine grained-screening Competitive strengthsMarket share

Product distributionThe on-going discount trends are fuelled by the growing role played by the internet in apparel in Denmark, making price comparison easier. Bertoni is marketing its products through its online store, it had numerous ads in the magazine Euroman, it has a strong presence at Danish and international fairs and social events. Bertoni also detains subsidiaries in Denmark, which helps them advertise their seasonal collections.ImageBertoni designs, manufactures in long lasting materials, a wide range of suits, from leisure time suits to real formal suits, with clean, sharp Scandinavian expression. Bertoni has developed their own fit for suits: young, comfortable and in compliance with the international trends.Financial resourcesOn Danish market, many players had to withdraw completely or drastically reduce their activity. Both domestic and international players had hard times, the general tendency is that international players received a harder hit.Nonetheless, even though Bertoni only had 0.3%[footnoteRef:11] market share in Denmark, and a 2012 turnover only slightly above 46.5 million DKK[footnoteRef:12] (much smaller than many bigger international competitors), it has successfully managed to maintain on the Danish market, and even expand in Ireland and Norway. [11: Company Shares (by Global Brand Owner)] [12: Proff . The business finder. Acc. 31/10/13. http://www.proff.dk/firma/bertoni-bruuns-galleri/aarhus-c/-/1015514066/]

3. Segmentation, Targeting, PositioningWe have decided to begin our quest for the perfect customers by assessing the male area of the German market, with specific focus on the city of Berlin. In order to start our STP analysis, we are starting with the segmentation process.

SegmentationPlacing Bertoni in a Business to Consumer market, we have started our customers segmentation process by looking into demographic criteria. Firstly, the sex ratio of people between 15 and 64 is 1.02 male(s)/female[footnoteRef:13]. Considering Bertoni is an exclusive men clothing selling company gives the chance from the start to appeal to a bigger market. [13: http://www.indexmundi.com/germany/sex_ratio.html]

We have identified different segments on the Berlin market based on the following criteria: neighbourhood, life cycle and age, with or without kids, income, interests, lifestyle, status and educational level.The Young and Wealthy segments demographic features[footnoteRef:14] are represented by a wealthy income, an age range between 25 and 44, with an employment level of managers. Moreover, they live in urban areas and have a high educational level. As behavioural characteristics, they travel to Asia, own and Audi A3, or similar, read authors like Dwell, and watch Independent Movie Channel. In addition, the Young and Wealthy live in fashionable neighbourhoods on the urban fringe. They attend fitness clubs and clothing boutiques, casual restaurants and all types of bars. They do not have any kids. [14: PRIZM NE Segments, Segment Look-up, acc. 31/10/13http://www.claritas.com/MyBestSegments/Default.jsp?ID=30&menuOption=segmentexplorer&pageName=Segment%2BExplorer]

Another potential segment might be the Bohemian. They represent the nation's most liberal lifestyles. Its residents are an ethnically diverse, progressive mix of young singles, couples, and families ranging from students to professionals. In their funky apartments, Bohemians are the early adopters who are quick to check out the latest trend, movie, nightclub, laptop, and microbrew. They live in urban areas, have a medium to high income, and are grouped between 25 and 50. Their educational level is usually high, but lower than the Young and Wealthy. As lifestyle behaviour, they shop at Gap, drive an Audi S4 and watch foreign movies. They also read GQ and do not have kidsThe Spenders are aged between 25 and 44, live in urban and suburban areas and have a high level of education. Mostly they appear without kids and with professional jobs, as in low level manager. Although they have a high level of income, they have a low experience in saving money, concentrating on paying off their student and auto loans. Moreover, a lot of their money supports lifestyle activities like skiing or ice-skating. The Spenders also like to manage their finances on their mobile device and do their shopping online.The Online Addicts are defined by individuals between 25 and 44, living in urban areas and having a very high educational level. They place themselves at the top of the list when it comes to online stock trading and bill paying, as well as buying in online retailers. They have mediocre to high income level and moderate income producing assets. They have managerial level employment. As lifestyle characteristics, they shop at Banana Republic, read The Economist, practice online banking. They like to listen to VH1, do fitness and read health magazines.The Pragmatics are the ones who use the technology to simplify their lives. They are grouped between 25 and 44, live in urban area and have a high income. Due to their high income, they invest in household electronics for their home office and for the work place. They prefer to be fully equipped in matter of technology and they usually bank on their mobile devices. They do not have any kids, but they have a very high educational level and managerial employment level. They visit Linkedin and go mountain-bicycling.As mentioned in section 2, the German men consumer behaviour is most likely to become the most dynamic under the influence of the increasing number of men who are become fashion conscious.[footnoteRef:15] Suits for young men are also in advancing demand.[footnoteRef:16] [15: J. Heuser (2010): Export Marketing Survey: German Market for Textile and Clothing] [16: Ibid]

The motives of buying casual but also formal orientated clothing for the identified customers are more likely to be: the dress code in the work place, the status or the social category that they belong to, new trends, habit due to the amount of time spend online, high disposable income, young age or their high sense of style.

TargetingAfter identifying the markets segments and dealing with the market attractiveness and Bertonis strengths in our market selection process, we are looking into the selected segment attractiveness and how profitable this might be. Firstly, since the Young and Wealthy segment is at its peak in matter of population, as shown in the age pyramid, it is more certain for us to have bigger sale, although we have to take in consideration Germany aging population. Moreover, this segment has the necessary disposable income in order to afford Bertonis medium to high priced clothing line. Also, due to their managerial level jobs, the dress code is mandatory, which can give them a strong buying motive. They are people who like to keep in touch with fashion and appreciate the newest trends, and in addition, they would be interested in a foreign brand. The Young and Wealthy are located in fashionable areas, filled with frequently visited boutiques, which gives Bertoni a stronger rate of success.Choosing the Young ad Wealthy as our target group is also a result of our field research. After interviewing 92 people, we have found out their net income, situate around 2500 per month. Moreover, the second highest rated buying motive was dress code in the work place. In addition, we have found out that, in average, our segment spends around 300 on a suit which also contributes to placing Bertonis clothing lines on matching price. The highest rating of suit buying place choice concluded to be the special boutiques, followed by Chain store and Shopping Center. Our target group also reported that they bought their last suit approximately 9 months ago, in an average, which matches with the general trends of people buying clothes in the spring season, due to the psychological need of renewal after winter, but also to be in touch with the newest trends. Additionally, we can observe the preservation of a long tradition of Germans to purchase clothing online.Since we have chosen only one segment for targeting, we would also adopt the Niche Marketing strategy. We will mold on our customers needs and give a unique performance for this specific segment on the Berlin market. Unfortunately, due to the fact that Bertoni is a rather small/medium company, it will only be able to satisfy its customers on an average level, for the beginning.

PositioningAfter analyzing the shopping behaviour of our target group and how well they identify with Bertonis style, we have reached the conclusion that most of our customers are medium to quite high identifying themselves with our clothing style. Moreover, the majority stated they would probably buy our products. In addition, we have also looked into our main competitors Hugo Boss and Tommy Hilfiger, which our market research reinforced that they are our target group main choices when it comes to suits. (See appendix for competitor analysis).As points of difference, Bertoni could easily gain ground by being a Danish company who designs and manufactures all their products in Denmark. As points of parity, Bertoni may share clothing design similarities with competitors brand. The foreign nature of the brand can create as well as an advantage, by being accepted as different, interesting, new and luxurious, but, on the other side, its lack of popularity might create selling problems. Where 1 represent Bertoni, 2 is Tommy Hilfiger and 3 is Hugo Boss.

Concluding the positioning map, Bertoni can be placed at the border between casual and formal, leaning to an expensive price. Moreover, from the field work we have also noticed an inclination of our target group towards casual type of suits and outwear.

4. Choice of entry modeInternal factorsFirm size: -Bertoni of Denmark's 2012 turnover of 46.598 million DKK[footnoteRef:17] (approximately 6.25 million[footnoteRef:18] EUR would be enough to rank it as a small firm, but the comparison with competitors such as Tiger of Sweden (100 million EUR) or Hugo Boss (769 million[footnoteRef:19] EUR) can give an even more indicative idea. A SME would normally approach a new international market choosing an externalization option. [17: Proff . The business finder. Acc. 31/10/13. http://www.proff.dk/firma/bertoni-bruuns-galleri/aarhus-c/-/1015514066/] [18: Tiger of Sweden. Press release, 23 October 2012. Tiger of Sweden/Jeans paints the autumn black with very own colour Acc. 31/10/13. http://brand.tigerofsweden.com/Press/Press-releases/Tiger-of-SwedenJeans-paints-the-autumn-black-with-very-own-colour-/] [19: Hugo Boss. Pressemitteilungen. Acc. 31/10/13. http://group.hugoboss.com/en/2154_3217.htm]

International experience: +Bertoni international activity dates back to the 70's[footnoteRef:20] and includes both export and hierarchical modes: it has stores in Denmark, Norway, Ireland and exports to the Netherlands[footnoteRef:21]. While cultural differences can't be overlooked[footnoteRef:22], Bertoni's degree of international experience point in the sense of internalization. [20: LinkedIn. Bertoni Norway AS. Acc. 31/10/13, http://www.linkedin.com/company/bertoni-norway-as] [21: Bertoni of Denmark. Acc. 31/10/13. http://www.bertoni.dk/contact/] [22: A very emblematic example is given by IKEA's original failed attempt at entering the Japanese market in the '70s. See also A. Stolba (2009): Ikeas failure and success on the Japanese market. Aarhus School of Business.]

Product complexity: -Bertoni's products don't really benefit from economies of scale, nor they require high transportation costs.Product differentiation: +On the other hand, as its strategy is based on brand perception, Bertoni has all the interest to keep production under control.

External factorsMarket size/growth: +See section 2Intensity of competition: -See section 2 and appendix 5.

Country risk/demand uncertainty: +Germany is overall characterized by a low risk, both from a political[footnoteRef:23] and an economical[footnoteRef:24] point of view. Perceived demand uncertainty is thus not increased. This gives more chances for internalization. [23: Business Monitor International. In-depth country-focused analysis on Germany's economic, political and operational risk environment, complemented by detailed sector insight. Acc. 31/10/13. http://www.businessmonitor.com/germany] [24: GlobalEdge. Germany: Risk Assessment. Acc. 31/10/13. http://globaledge.msu.edu/countries/germany/risk]

Sociocultural distance: +An analysis of Hofstede dimensions of cultural difference immediately shows how the market Bertoni has experience with are actually more distant from Denmark than Germany itself.

Trade barriers: -As Germany is both part of the Schengen agreement and of the EU, direct import barriers, as well as indirect barriers such as different product regulations and standards, are virtually nonexistent. This would encourage an export mode. See also section 2 and appendix 4.Small number of relevant intermediaries available: -As mentioned in section 2, retailers and exporters in the clothing industry are widely[footnoteRef:25] available[footnoteRef:26] on the German market, thus export modes can be preferred. [25: For example, IndustryStock.com B2B Hersteller und Produkt Verzeichnis. Acc. 31/10/13. http://www.industrystock.de/html/Bekleidung/product-result-de-5990-0.html] [26: Europages.de. Suchergebnisse fr Import/Export - Textilien und Bekleidung. Acc. 31/10/13. http://www.europages.de/unternehmensverzeichnis/did-17/hc-17680/ImportExport-Textilien-und-Bekleidung.html]

Desired mode characteristicsRisk-averse: -While no first-hand information is available, the tendency shown by Bertoni to establish stores in different markets after some years (in the case of Ireland[footnoteRef:27], more than 10 years) after its products are first available on the market, and the cautious approach to new markets through fairs[footnoteRef:28], indicate a specific risk-averse decision-maker, who would typically prefer export modes. [27: JOE.IE. Suits focus: Bertoni menswear. Acc. 31/10/13. http://www.joe.ie/style/suits-focus/suits-focus-bertoni-menswear/] [28: Bertoni of Denmark. Highlights from the European Fashion Fairs. Acc. 31/10/13. http://www.bertoni.dk/be-inspired/highlights/]

Control: +As aforementioned, Bertoni's competitive advantage is based on its image perception, and an incautious expansion of sales at the hands of many retailers could severely affect it. As such, control is very important to the company, which could benefit from intermediate entry modes during the time required to eventually establish a proprietary presence.Flexibility: -The industry Bertoni is in requires a high level of flexibility to adapt to a peculiarly variable demand, thus intermediate or export modes are to be preferred.

Transaction-specific factorsOpportunistic behaviour: +Transaction costs: +As aforementioned, Bertoni's activity is particularly vulnerable to the opportunistic behaviour of retailers or exporters. In particular, the number of intermediaries should be kept as low as possible to reduce the margin of the final buyer's price that, being redirected to retailers, represents no profit for Bertoni.Tacit nature of know-how: -While Bertoni's products are suits and garments of high level and design, no considerable investment is required to train people to handle their distribution, as similar products are clearly already available in Germany.

Choice of entry mode

The Hollensens model clearly indicates that the best choice for Bertonis entry in the German market would be an internalization one. Nonetheless, Bertonis limited resources and the managements risk-averse orientation dont favor this option. Also in consideration of Bertonis international experience, based on a multi-layer approach, and particularly because of the extreme diffusion and popularity of online purchase in the German apparel market, we suggest that Bertoni makes once again use of its strategy of cautiously entering the market with a direct export approach through online channels, and to set a more stable presence by opening its own stores (foreign sales subsidiary) as soon as the resources allow it provided that the export experience confirms the market as attractive.

5. Culture analysisAn analysis of Hofstede's dimensions of cultural difference at national level shows many slight elements of difference, and a few significant ones, between Denmark and Germany. It is of primary importance, in the context of business relationships with German partners, that Bertoni keeps in mind these elements. Even though they can't be taken as iron rules, valid for each and every German (or Danish, respectively) person, they surely represent critical points, whose good or bad exploitation could make the difference between success and failure of any business between partners of the two countries.

The largest difference is registered in the masculinity versus femininity dimension. Germany is the typical masculine culture, meaning that material success, power, recognition, individual achievement and competition are accepted as objectives in life. The German business world is dominated by men, who are very goal-driven and deal-focused. To improve companys benefits is as much important as to earn a good salary and show status by cars, clothes and expensive jewelry[footnoteRef:29]. In negotiations, Germans are assertive, tend to be very direct and to go as fast as possible, almost abruptly, to the main discussion[footnoteRef:30], wanting to achieve measurable results[footnoteRef:31]. [29: http://geert-hofstede.com/germany.html; acc. 31.10.13] [30: German business customs and practices; http://mdna.com/; acc. 31.10.13] [31: German business customs and practices; http://mdna.com/; acc. 31.10.13]

Denmark, on the contrary, is a typically feminine culture. Danes put emphasis on good relationships, cooperation, clarity and modesty. Conflicts are solved by dialog, compromise and negotiation[footnoteRef:32]. People favor solidarity, equity, flexible working hours[footnoteRef:33]. In companies, team work is the classical Scandinavian solution. As a consequence of the difference in this dimension, Bertoni could think of employing assertive men to deal with German partners, in order to ensure the appropriate level of recognition. [32: http://www.limbistraine.com/ro/cercetare/Gabriela-Sauciuc/3.Denmark-Hofstede-s-cultural-dimensions.html; acc. 31.10.13] [33: http://geert-hofstede.com/denmark.html]

The second largest difference is in the Uncertainty Avoidance dimension. Scoring very high, it can be said that in Germany every aspect of business must be discussed in detail, all the arrangements made precisely and all deadlines, confirmations, offers and contracts be in writing. Any sudden change, even if to better outcome, is unwelcome. Germans look for a significant amount of information about new business partners, so in practice a package of documents and references might have to be ready at request. Product quality and safety are also very important. In contrast to Germans, Danes favour higher levels of flexibility, curiosity and openness to the diversity, and are more willing to take risks, try new ways for innovation. In combination with the low Power Distance index, in Denmark discussions and protest are accepted and competences overrule the authorities, which is not the case in the higher PDI-scoring Germany. Danes usually use humor in business situations and see the judicious use of humor a key weapon in the search for hygge[footnoteRef:34], which Germans, who conduct business in more formal manner, might not understand. [34: http://www.worldbusinessculture.com/Danish-Business-Communication-Style.html; acc. 31.10.13]

The title etiquette is also an important element, as Germans make extensive use of titles like Frau/Herr or business and academic titles for everyone except close friends[footnoteRef:35], so its essential to adapt this practice in direct communication and in all written correspondence. [35: German business customs and practices; http://mdna.com/; acc. 31.10.13]

The business dress code is also more conservative, and in meetings age is regarded with respect[footnoteRef:36]. Both in Danish and German companies employees are expected to be part of the decisions rather than merely following orders, the way of management is democratic and organizations tend to be flat. [36: http://www.cyborlink.com/besite/germany.htm; acc. 31.10.13]

In both societies, employees might openly manifest their dissatisfaction if one strong, dominating force directs everyone else[footnoteRef:37], as both score as very individualistic (74 and 67 IDV). In both societies people stress on personal achievements and individual rights, individual skills are valued and employment contracts take into account the mutual benefits for both parties[footnoteRef:38]. [37: http://www.worldbusinessculture.com/Business-Teams-in-Denmark.html; acc. 31.10.13] [38: http://www.limbistraine.com/ro/cercetare/Gabriela-Sauciuc/3.Denmark-Hofstede-s-cultural-dimensions.html; acc. 31.10.13]

6. ConclusionOur field and desk research highlighted how Bertoni currently targets the Young and Wealthy segment, aged between 25 and 44, with medium to high income and high educational level. This segment is widely present in the area of Berlin, and a wider analysis, also through a fine-grained screening, allowed to identify the German market as attractive for Bertoni. Also in consideration of Bertoni's experience with online channels, and of the diffusion of these tools through the German market, our suggestion for an entry mode is a multi-layer approach, with a first phase of direct export, that can also help to better evaluate the market, followed by the establishment of foreign sales subsidiaries as soon as the resources - and the generated turnover - make it convenient. The level of control that Bertoni needs imply that the time between the two phases must be as short as possible.While developing business relationships with German partners, Bertoni has to take in consideration the much higher level of assertiveness and directness of Germans, that typically value immediate and measurable results more than dialogue and negotiation. A higher level of formality, the cautious use of title etiquette and a large amount of written documentation are also to be recommended.As a conclusion, the best way for Bertoni to enter the German market in the short run is to expand its online availability to Germany and establish a direct export channel, preferably opening owned stores in the city of Berlin as soon as resources become available.