Project no. Semester 2 Module 4

Project title: Internationalisation of

Korsbæk på Bakken

Class and group/team number: MEC Group

Group members: Nika Čontošová, Ida-Lotta Seppälä, Sofie Reland, Sandra

Beenfeldt, Amalie Rasmussen

Date: 30 April 2015

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Number of characters (including spaces,

footnotes, end notes and text boxes):

23,703

Table of Contents

1. Motivation.....................................................................................................................3

1.1. Research Question......................................................................................................3

1.2. Subquestions..............................................................................................................3

1.3. Methodology...............................................................................................................3

1.4. Limitations.................................................................................................................4

1.5. Competitive Advantage..............................................................................................4

1.6. Korsbæk Preparedness..............................................................................................5

1.7. 9 Strategic Windows...................................................................................................5

1.8. Major Motives for Export..........................................................................................5

2. Step 1: Definition of segmentation criteria...................................................................6

2.1. Environmental Analysis.............................................................................................6

3. Step 2: Development of Segments.................................................................................7

3.1. Target Group.............................................................................................................7

4. Step 3: Screening Process..............................................................................................8

5. Step 4: Microsegmentation...........................................................................................8

5.1. Germany Environmental Analysis.............................................................................8

5.2. Danish Culture...........................................................................................................9

5.3. German Culture.......................................................................................................10

5.4. Business Relationship...............................................................................................10

5.5. Buying Behaviour.....................................................................................................10

6. Financial considerations..............................................................................................11

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7. Conclusion...................................................................................................................12Sources.......................................................................................................................................................................................14Appendix................................................................................................................................................................................... 15

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1. MotivationOur proposal is to export the Danish concept Korsbæk på Bakken (Korsbæk) to the German market by

collaborating with the well-established Europa-Park amusement park located in Rust, South Western

Germany.

On 30th of April 2015, Torben Pedersen will reveal his passion to recreate the old Matador city

Korsbæk that is located on Bakken, Klampenborg, Denmark. Matador is a Danish TV series filmed in

1978 - 1981 about Denmark during the 1930’s and 1940’s. The themed area on Korsbæk på Bakken

offers a mixture between restaurants and specialty stores and the experience of that time period.

We have chosen the experience entertainment industry because we consider the concept to be an

experience both in Danish history, food culture as well as musical culture in the 1930-40’s.

1.1. Research QuestionWe are to select the first foreign market for an international expansion of the concept Korsbæk through

a screening process, this includes taking in account macroeconomic, microeconomic, cultural and

financial factors.

1.2. SubquestionsThrough our process to analyse the foreign markets for expanding the Korsbæk concept, we also need

to identify the following subquestions to support our outcome.

How do we export the concept Korsbæk of the Danish culture in 1930-40’s?

Who and how does the target group buy in our market?

What is the export preparedness or readiness of the concept Korsbæk?

What is the focus market of the concept Korsbæk?

1.3. MethodologyIn order to answer our research question we first analysed Korsbæk’s value chain to gain knowledge of

the company and to identify where they would be placed in the 9 strategic windows. With this

knowledge and using the 4 Realm Model we also identified the concept to be in the experience

entertainment industry. To screen all the countries that the Danish TV series Matador was televised in,

we followed the funnel method process.

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Our first step was the segmentation criteria where we analysed the industry in both macro and micro

factors using Porters 5 Forces, PEST and 7 O’s framework where we will apply these factors in our

screening process (third step).

The second step, development of segments, we used the matrix to identify our target customer. The

third step we collaborated with the Computer Science team to create a rating sheet where we inputted

our criteria’s to narrow down our international markets.

Our fourth step was selecting the two markets to get a further in depth analysis by applying the Porters

5 Forces, PEST, 7 Cultural Dimensions and the buyer behaviour.

We then needed to have an in depth knowledge of Korsbæk financial situation by calculating their cash

flow, discount rate and net present value.

1.4. LimitationsDue to the Matador city Korsbæk concept only being implemented from 30 April 2015, we are limited

in regards to factors such as their success and financial situation that prove they have the readiness to be

able to take this concept to an international market. Therefore we have taken this concept to focus on

the experience of the Danish culture in the 1930 - 40’s to the international market rather than the focus

point being on the Matador TV series.

1.5. Competitive Advantage  We have done an analysis of Korsbæk på Bakken’s value chain, which led us to identifying the

company’s strategic capabilities, then looked at the VRIN framework to identify Korsbæk på Bakken’s

sustainable competitive advantages. We have come to the conclusion that Korsbæks’ competitive

advantage is that they have the rights to use the Matador series and the uniqueness of restaurants

serving authentic Danish food from the 1930-40’s. The rights include that they have gone through the

legal proceedings to get every aspect of Korsbæk på Bakken approved by the original creators, which

entails that they are staying true to the whole concept of Matador TV series. This includes the unique

restaurants, where the menus have been pre-tested and approved by the original writer of Matador, and

the actors portraying the home of the main characters in cooking, hosting and atmosphere.  

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1.6. Korsbæk PreparednessWhen we have examined the value chain, VRIN and the 4 Realms of Experience we can see that the

company is experienced in the entertainment industry when it comes to theater, creating experiences

within an amusement park and have a unique competitive advantage.

Cirkuryen is a family owned business since 1984 where the owner, Torben Pedersen, is currently

financing the complete project of Korsbæk på Bakken. The project is due to be completed on 30 April

2015 where there will be 5 restaurants, 1 bar, 6 shops and 14 actresses and actors recreating scenes from

the Matador series. Korsbæk suppliers are located in Germany and through a Danish agent the

souvenirs are made in Asia. There is a large interest by consumers for this concept where they have

35,000 bookings for the restaurants and tours have been placed already.1

The 4 Realms of Experience showed that there is a large emphasis on entertainment by the atmosphere,

music, food, culture and actors interacting with the customers in a typical Danish town from the 1930-

40’s.

Though Torben Pedersen is an experienced owner of a well-established entertainment park, Korsbæk på

Bakken is a new concept and we believe that they need to establish themselves in both terms of the

concept proving to be successful and financial growth in order to understand how to strategically

expand abroad. This assumption, is supported by Jeanet Rytter, Marketing Coordinator from Korsbæk

på Bakken, where she mentioned in her presentation that based to their own estimates they would be

ready for expansion in three years time when they have seen Korsbæk på Bakken off the ground

properly and know what to focus on or avoid next time they implement the concept in a new market.

1.7. 9 Strategic WindowsWe have analysed that Korsbæk’s preparation for internalisation is immature, because the concept is yet

to be implemented, there are no profit calculations nor have they done any research into the potential

markets abroad. In the entertainment industry Matador TV series has been shown in 20 different

countries worldwide, and it is assumed there are devoted fans in other countries besides Denmark. We

see that the concept of Matador has the potential to grow globally, because of its recognition. When

taking these factors into account we have come to the conclusion that number 4; seeking niche in

international markets is where they fit the best for the time being.

1.8. Major Motives for Export Proactive motives for the internalization of Korsbæk are profit and growth goals, managerial urge and

the aspect of a unique concept. Torben Pedersen would most likely want to create profit and growth

within this company as one of the main reasons to go abroad. Due to Torben Pedersen initiating this 1 Lyngby Taarbaek, 2015, http://lyngby-taarbaek.lokalavisen.dk/korsbaek-klar-til-bakken-/20150226/artikler/702269817/1010

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concept in Denmark through his own passion story behind the TV series and investing in the whole

project he would also most likely be an initiator to expand to other countries. With this concept of

creating an experience from a TV series like Matador is unique, we believe that focusing more on the

Danish culture aspects that those countries Matador was shown in there is the possibility that people

would appreciate this concept.

2. Step 1: Definition of segmentation criteria

2.1. Environmental AnalysisOur first step was to narrow down the countries to those that had the Danish Matador TV series

televised. We assumed that these countries would have some knowledge of the series and also the

Danish culture for us to be able to implement our concept there. This directly narrowed down to 18

countries: Norway, Sweden, Germany, Japan, Finland, Poland, Spain, Canada, Belgium, Australia,

Iceland, Croatia, Slovenia, Bosnia-Herzegovina, Macedonia, Kosovo, Serbia and China.2

Based on our analysis of the experience entertainment industry using tools such as the PEST analysis,

Porter's 5 Forces framework and secondary information. We wanted our criteria to be measurable,

accessible, profitable and actionable within both our industry and our potential segment and target

group.

We are looking into political factors such as property rental costs, labour force in services and tax laws

or VAT in order to understand if the market is optional for building such an attraction, employing

labour forces within our industry and to see how high prices would be for such an entertainment as

Korsbæk. GDP, GNI, salary after taxes and the countries inflation rates are the economical factors that

we have chosen because we believe that they give us an understanding of the country's overall

economic situation and the potential risks in our market.

We identified important criteria based on our 7 O’s analysis from which we have chosen to look into

demographics such as age, gender, medium age and the percentage of women in our chosen target

group.

Lifestyle trends are included in these social factors that we find important. Eating out trend, knowledge

of Matador TV series, levels of entertainment and disposable income. We have based the disposable

income on how much the VAT tax is in the country to calculate how much they have to use on leisure

items and entertainment.

2 Appendix 1

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When narrowing our market we choose high importance on the countries VAT tax in order to calculate

how much they have to use on leisure items and entertainment, disposable income, the percentage of an

average meal vs disposable income, eating out trend, weather, cultural factors and the percentage of

women in our age group.

We identified that countries, such as Norway, Australia, and Germany have a higher gross national

income (GNI) and when taking in the account their percentage of VAT and inflation rates, there is a

correlation that they have a higher disposable income.

There is a growing trend in eating out where this corresponds with a continued growth in the experience

entertainment industry. 3

3. Step 2: Development of Segments

3.1. Target GroupWhen applying the 7 O’s analysis and segmentation of our potential customer along with Jeanet Rytter

presentation we have chosen to target group of women between the age of 35 to 55 who like to go out to

socialise.

They are preferably enthusiasts or consumers who have experienced Korsbæk på Bakken or aware of

the Matador TV series in the 1980-90's. Though our main focus will be women who have an interest in

the series though we want to expand our consumer base by those who are interested in history and who

want to experience Danish culture.

We also identified that the market we will chose to expand too should have a high enough infrastructure

for our potential customers to have the resources and the means to buy a new experience within the

existing market of entertainment. The target group will be influenced to come to Korsbæk by word-of-

mouth and campaigns about Korsbæk as well as the marketing mix at the Europa-Park amusement park.

Table 1.0: Korsbæk Target Group›

3 Appendix 1

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4. Step 3: Screening ProcessThe countries that scored the highest using the rating sheet was Australia with 94,75, Sweden with

84,25; Norway with 87,5 and Germany with 82,25. Looking at these figures Sweden and Norway would

be high contenders but we have decided not to internalize into them because we believe that they can

potentially prevent travel to Korsbæk på Bakken. 4

There would be too much of a competition to the original concept for it to be the best alternative, in our

opinion. This is supported a source that states that travelling to Denmark from the Nordic countries has

been increasing since 2008 and Jeanet Rytter stated 1 million visitors from Sweden and Norway in 2014

from total 2.5 million visitors.

By looking at Hofstede, Australia scored very low on power distance and high on individualism. [1]

Australia is considered high on masculinity and indulgence same as Denmark.5 This is really good if we

want to go into the Australian market because they are already “willing to buy” and according to our

criteria they have a high disposable income and eating out trend is relative high.

Australia has scored the highest and the country is optimal in both micro and macro factors, according

to our analysis, we have decided not to internalize to Australia. We have based this conclusion on our

company analysis and preparedness of Korsbæk based on our value chain, 9 strategic windows and

motives for export. These state that they are not mature enough to go into a country so far away

geographically, even though the country is most optimal. This is also supported by the internalization

theory known as Uppsala model that we have chosen to implement. Uppsala states that if a company

has no regular export, not too experience on foreign markets and their culture, like Korsbæk has. They

should export to markets close to home in order to gradually gain experience and more understanding

when venturing further geographically in the future. Hence, to these reasons we have chosen Germany

as our new potential market for the internalization of Korsbæk.  

5. Step 4: Microsegmentation

5.1. Germany Environmental AnalysisFor in depth analysis of our selected market, Germany, we applied the PEST analysis, Porter's 5 Forces

framework.

We chose to follow the Uppsala internationalisation model as the German market has advantages to

working alongside them. Germany is a part of the EU since 1993 where they have similar trade and

laws as Denmark. They have the 4 th largest economy and 2nd largest exporter6 in the world where 70% 4 Appendix 15 Hofstede, 2015, http://geert-hofstede.com/australia.html6 Wikipedia, 2015, http://en.wikipedia.org/wiki/Germany

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of their GDP is in the service industry. 7 They have an excellent engineering and strong innovation

where the development of their online presence is influencing the increase of tourism.8

Germany is the 2nd most popular destination for Europeans9 where the projected entertainment industry

is to rise 4% per year from 2013-2018.

The experience entertainment industry is at a stable market position in Germany with 7 major theme

parks where our recommendation is to place Korsbæk’s concept in Europa-Park amusement park

located in Rust, South Western Germany. Europa-Park has a low threat of new entry as they hold the

majority of share in this industry where they are the second largest amusement park in Europe. 10

Graph 1.0 Denmark comparison with Germany11

5.2. Danish CultureAccording to Hofstede cultural dimensions Denmark scores low on power distance. Denmark is a very

individualistic country, which implies they are fairly easy to work with and are informal.12As Denmark

is a feminine country they value equality, solidarity and quality in their working lives. Danes do not

need much structure in their workplace so they have tendency to change plans overnight and to add in

7 PEST Analysis, 2013, http://pestleanalysis.com/pest-analysis-for-germany/8 Euromonitor, 2014, http://www.euromonitor.com/travel-and-tourism-in-germany/report

9Germany Travel, 2014, http://www.germany.travel/media/pdf/dzt_marktforschung/GNTB-Incoming-Tourism-Germany-

2014.pdf 10 Go Germany, http://gogermany.about.com/od/sightsandattractions/tp/BestAnd-Amusement-Parks-Germany.htm 11 Hofstede, 2015, http://geert-hofstede.com/australia.html12 Hofstede, 2015, http://geert-hofstede.com/denmark.html

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last minute changes.13 Body language is important to Danes where emotions are expressed and it is

important to maintain eye contact. 14

5.3. German CultureKorsbæk need to consider the German culture and how as a Danish company they can work alongside

potential investors and their target group in this market.

The German culture is a low context according to Hall because they are very direct in their

communication and do not communicate “between the lines”.

By looking at Hofstede model for Germany scores are low in the Power Distance. This reinforces they

have a strong middle class where communication is very direct and one of the most direct countries in

the world. We have to consider as well according to Trompenaars 7 Dimensions Universalism - they are

high on importance of laws and do not go into relationship before doing business. Germany is

considered an individualistic country where they are measured by their own performance and do not

mix private life and business. Status is shown in way of material things as cars, watches etc. Germans

are neutral and time conscious where they focus on the objective and considered masculine culture.

5.4. Business Relationship Important aspects to consider when venturing into a project for 10 years with Germany, is though the

German culture can be similar in some respects, the Danes will need to take into consideration the

masculine culture where they are very formal, expecting a structured business process taking in account

the importance of building a strong trusting relationship with them.

Europa-Park concept is an experience entertainment themed park of different cultures from Europe

including The Netherlands, Austria and Scandinavia.

The owners of Korsbæk på Bakken and Europa-Park (Mack family) are similar with their background

in regards to both having experience in owning family businesses in the experience entertainment

industry. These similar backgrounds show that they both have passion and same values that can be

successful for the business.

5.5. Buying BehaviourWhen considering the buying behaviour of German consumers we have established that there is a trend

of eating out and which is supported with couples choosing to have children later on in life. Germans

have had a reputation for being thrifty where they are saving an average 11.3% of their income that is

one of the highest percentages in Europe, according to OECD.

13 Hofstede, 2015, http://geert-hofstede.com/denmark.html

14 Danish Net, 2015, http://www.danishnet.com/business-denmark/body-language/

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According to the latest data, German consumers expenditure has been surprisingly resilient despite fears

about the currency bloc's intensifying debt crisis. They are likely to be called ‘Strategic Savers’ who are

driven by low cost that accounts for 21% of all German shoppers. This is despite the fact that Germany

has fared better economically than most markets in recent years. 15

This connects Germans to having a higher income for both those with and without children and able to

afford to dine out. 16German consumers are influenced by top awarded Michelin restaurants that shows

there is a need for dining experiences with well-known chefs.

6. Financial considerationsBased on the information received from Korsbæk the total investment for this venture would be €12

million to establish and it is assumed to last for 10 years. We do not have any concrete turnover

numbers due to Korsbæk på Bakken not yet been established. We calculated realistic assumptions to

conclude whether they can expand to the German market.

Table 1.0 Korsbæk Financial Assumptions

We assumed that the following costs is that 33% of the €12 million (= €4 million) goes to interior,

marketing etc.  We have set aside labour, material and other costs related to the whole concept of

restaurants to be built for €8 million. After the 10 year concept period we can assume that the scrap

value (if we have to sell the whole ventures) is worth 25% of the €8 million which gives us a scrap

value of €2 million.

15 Kantar Media, 2014, http://www.kantarmedia.co.uk/news-views/our-latest-news/two-thirds-of-european-grocery-shoppers-dont-buy-on-price/

16 Consumer Lifestyles in Germany, Euromonitor, 2014, consumer_lifestyles_in_germany.pdf

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We decided on a discount rate of 15% because we think this is a high risk investment due to the

concept, and especially due to it not having been established in Denmark at this stage.

For the 6 restaurants and bars there is in total of 2,500 seating per day if it is fully booked. We assume it

is possible to have an average of 1000 occupancy per day per annum.17

They will be located in Europa Park that is open 240 days per annum (p/a) where we have calculated

the employee cost to be approx.  €1 million a year if we have 50 employees working 37 hours a week to

an average salary of €17.42 an hour.

We calculated the critical value of net cash flow per annum at a net profit value (NPV) that will be at 0

after 10 years we calculated that we need a cash flow of approx €3.3 million p/a.

To cover our monthly costs of employee payments we calculated that we need a profit of approx

€13,800 per day. With our 1000 occupancy a day this would have Korsbæk’s profit would be €13.85

per seating. We then need to take into account that the cost of food and beverage is 32% of each euro

where an average meal price including all costs should be €20.67.18

Our opinion is this is a realistic calculation to achieve based on sources gathered that an average meal

for 1 person at a mid-range restaurant in Germany is approx. €20.19

We feel this venture is possible to achieve based on the calculations due to this only assuming that our

restaurants have 40% occupancy of the available seats.

7. ConclusionWe have chosen the potential market for internationalization to be the German market, because

Germany’s infrastructure meets our needs for the Korsbæk concept, they have a similar culture in

business and lifestyle as well as in ownership of the amusement park where it would be placed.

As explained throughout our report, the German market is also the most optimal choice because of the

company, Korsbæk, preparedness to export. The internationalisation strategy that we chose is Uppsala

due to Korsbæk at an immature stage in their concept being launched on 30 April 2015 and not ready to

export beyond Europe at this stage. Korsbæk still has the potential to grow internationally, even though

they still have little experience because of their unique competitive advantage and concept, where our

17 Appendix 218 Small Business, http://smallbusiness.chron.com/average-profit-margin-restaurant-13477.html19Numbeo, 2015, http://www.numbeo.com/cost-of-living/country_result.jsp?country=Germany

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opinion that Korsbæk should wait until the concept has been implanted in Denmark before exporting it

abroad.

Korsbæk's Jeanet Rytter, estimated that they will be ready in 3 years. We support her assumption based

on the non-existing financial number that could estimate how profitable such a venture would be

abroad. Due to this internalization would be a high risk venture and the discount rate based on the

macro and micro factors, explained threw out the report, would need to be high at 15%.

There is the perfect location for Korsbæk, when they are ready, at the Europa Park. The park's concept

of having sectors with different cultures from Europe makes it the perfect place to put such a unique

concept involving both Danish lifestyle during WWII, Danish culture and food culture. The German

buying behaviour of having a high eating out trend and a high enough income to spend time and money

on their own amusement, supports the choice of the German market. The potential consumer would be

the same as for the original concept. Women between the ages 35-55 are decision makers in the family

and who like to socialize and have the expenditure to dine out regularly.

After we have taken all these factors into account there are positive and negative factors when

internationalisation Korsbæk to the German market. The most important factor to consider though is

that Korsbæk has the potential to grow though they are not ready yet for internationalisation, but will

most likely be prepared within the next few years.

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Sources

Korsbæk på Bakken, 2015, http://www.korsbaek-bakken.dk/

Hofstede, 2015, http://geert-hofstede.com/australia.html

Wikipedia, 2015, http://en.wikipedia.org/wiki/Germany

PEST Analysis, 2013, http://pestleanalysis.com/pest-analysis-for-germany/

Euromonitor, 2014, http://www.euromonitor.com/travel-and-tourism-in-germany/report

Germany Travel, 2014, http://www.germany.travel/media/pdf/dzt_marktforschung/GNTB-Incoming-

Tourism-Germany-2014.pdf

Go Germany, http://gogermany.about.com/od/sightsandattractions/tp/BestAnd-Amusement-Parks-

Germany.htm

Hofstede, 2015, http://geert-hofstede.com/australia.html

Lyngby Taarbaek, 2015, http://lyngby-taarbaek.lokalavisen.dk/korsbaek-klar-til-bakken-/20150226/

artikler/702269817/1010

Wikipedia, 2015, http://en.wikipedia.org/wiki/High-_and_low-context_cultures

Worldbank, 2014, http://data.worldbank.org/indicator/AG.LND.PRCP.MM

Numbeo, 2015, http://www.numbeo.com/cost-of-living/country_result.jsp?country=Denmark

Small Business, 2014, http://smallbusiness.chron.com/average-profit-margin-restaurant-13477.html

Incoming Tourism Germany, 2014, http://www.germany.travel/media/pdf/dzt_marktforschung/GNTB-

Incoming-Tourism-Germany-2014.pdf

Euromonitor, Travel and Tourism in Germany, 2015, http://www.euromonitor.com/travel-and-tourism-

in-germany/report

Wikipedia, Europa-Park, 2015, http://en.wikipedia.org/wiki/Europa-Park

Europa-Park, 2015, http://www.europapark.de/en

Southern Germany, 2015, http://en.wikipedia.org/wiki/Southern_Germany

German Politics, 2014, http://www.mygermancity.com/german-politics

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Appendix

Appendix 1.0

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Appendix 1.1

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