Copenhagen – the right location for Regional Headquarters

Today, many companies begin to organise their activities in regional structures. Reorganisation processes may be sparked of for a number of reasons and companies must carefully consider the right location when reorganising their regional activities. In this context, there are numerous reasons why companies consider Copenhagen an attractive location.

Regionalisation on the corporate agenda

Today, the trend of establishing regional structures in international business is becoming increasingly important. Companies that previously had country-based organisations are beginning to organise their activities regionally in order to achieve economies of scale, standardise processes and systems and serve a larger market from just one location. This way, it is possible to strike a balance between efficiency on the one hand and being close to the markets on the other.

Traditionally, regional structures have been applied to financing and accounting activities but today, the range of regional activities is widening to include for instance, customers services centres and centres coordinating human resources or handling distribution and logistics.

BASF-coatings, one of the leading distributors of car paint in Scandinavia, is an example of a company that has begun to organise regionally. The choice fell on Copenhagen when BASF-coatings decided to gather their order functions in just one call centre.

Scandinavia – one coherent region

Scandinavia is an example of an attractive area that many companies define as one region. In fact, 80 percent of the largest companies in the world with a presence in the Scandinavian countries define the scope of their operations as the Scandinavian region.

And this consideration makes perfectly sense. The Scandinavian countries are intertwined in language, history, culture and social structure. Travel distances within Scandinavia are relatively short and backed by a highly efficient infrastructure. Scandinavia therefore meets some of the basic requirements for a successful consolidation of country-based activities into regional solution.

Moreover, Scandinavia is an attractive market of 24 million affluent and productive people. The average GDP in the Scandinavian countries is about 20 percent higher than the EU-average. The Scandinavian countries are also the fastest adopters of new products and technologies in the European market. In addition, Scandinavian offers an attractive business climate from a global perspective. According to IMD’s World Competitiveness Report in 2004, Denmark is ranked as the best country in Europe when it comes to the ability to create and maintain an environment that sustains the competitiveness of enterprises.

Moreover, the new EU-countries Poland, Lithuania, Latvia and Estonia, all located around the Baltic Sea, contribute to further market developments in the region. The market has a potential to expand to a total of 70 million customers. Poland, Lithuania, Latvia, and Estonia present high growth rates and culturally and historically, the countries are tied to the Scandinavian countries. This way, there is a potential that a new attractive area – the Baltic Sea Area – is developing when the new EU-countries become more and more integrated.

Copenhagen – the strategic location in Scandinavia

In the attractive and expanding Scandinavian market, many companies consider a regional solution. Subsequently, they put a number of regions in Scandinavia under scrutiny and begin to benchmark the attractiveness of each location on a number of requirements that can vary according to the individual company’s context and industry.

A flexible labour market is one of the most important requirements for international business – particularly in an international economic climate that has become more and more volatile. The Danish labour market is the most flexible in Europe making it possible for companies to adjust working hours and the number of employees according to their particular needs.

The flexibility of the labour market is one of the main reasons why many companies choose Copenhagen as the location from which to develop and organise Scandinavian activities. According to an analysis from Copenhagen Capacity based on numbers from Ernest and Young, Copenhagen was ranked the third European city after London and Paris in attracting corporate headquarters in 2004. London and Paris are leading in attracting European headquarters while Copenhagen is successful at attracting Scandinavian headquarters compared to for instance Stockholm ranking 15 in the analysis.

Besides from a flexible labour market, there are many other reasons why companies prefer Copenhagen rather than other metropolitan areas in Scandinavia. Firstly, the Region offers the largest customer-base in Scandinavia. 9 million people live and work within a radius of 300 kilometres from Copenhagen.

Secondly, companies located in Copenhagen have the advantage of recruiting employees from the entire Øresund Region with a total population of 3.6 million inhabitants. The bridge across the Sound – the Øresund – has connected the Southern part of Sweden and the Capital Region of Denmark and the labour markets now integrate.

Finally, the infrastructure is very efficient and no other Scandinavian region can offer similar connectivity and access to distribution networks. Copenhagen Airport is the largest in Scandinavia and has been rated the best airport in Europe in 2004.

The flexibility of the Danish labour market and Copenhagen’s location in the heart of the Øresund Region were the main factors when the BASF-coatings chose Copenhagen as location for their headquarters and a new call centre. “It was first and foremost Copenhagen’s location at the heart of the Øresund Region, the recruitment possibilities and the flexible labour market that persuaded us” explains Michale Kock, general manager for the Nordic branch of BASF-coatings.

Previously, BASF, had sub-branches in Stockholm, Malmö, Helsinki, Tammerfors, Oslo, Århus, and Copenhagen. Today, the headquarters and a new call centre serving customers all over Scandinavia is located in Copenhagen. This way, BASF-coatings is prepared to maintain its position as one of the leading distributors of car-paint in Scandinavia.

Last updated on: 03-02-2006	<< Back   Top