Internationalizing Danske Shoppingcentre: A Report on the Possibilities of Danske Shoppingcentre Entering the Swedish Market

Abstract

This report assesses the possibility of Danske Shoppingcentre (DSC) expanding to the Swedish shopping center market by analyzing market factors, internal resources and capabilities, and the most suitable entry strategy. With an established and considerable market share of the Danish market, the potential for expansion is limited in the home market why an entry to a foreign market may be a suitable scenario. The findings in the report indicate that Sweden´s previous economic downturn is improving, and Sweden´s central bank projects increase in the economic activity, and GDP-growth. The cultural differences between Denmark and Sweden are low with similar demographics, consumer behavior, and social trust which improves the integration of Swedish employees to DSC´s organization. Competition in the shopping center industry are considered strong, with large international companies owning several top-tier shopping centers with prime locations. The report also finds that shopping centers considered top-tier with prime locations have been far more resilient during the economic downturn and are better at combatting the threat of online shopping. DSC´s strongest internal resources and capabilities consist of its experienced top management, as well as experienced Center- and Leasing Managers, with considerable experience and tenant network. DSC utilizes portfolio-wide agreements with both tenants and service providers which shows an organized effort to utilize their capabilities. DSC´s ownership of a joint-venture between two pension funds provides financial security, and commitment to significantly needed investments, due to their long-term investment perspective. Due to a saturated shopping center market in Sweden, the suggest best entry mode for DSC would be an acquisition-led entry strategy focusing on top-tier assets with prime locations, as their financial backing enables high initial capital investments. DSC should focus on areas in close proximity to Denmark, such as Malmö and Helsingborg, to keep the distance from management to assets close, and capitalize on location advantages to reduce the loss of Danish customers to cross-border shopping.