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Why Norwegian companies should be inspired by transformation


Knut Erlend Vik and Øystein landgraff

Dagens Næringsliv

8 May 2013


In a recent article in Dagens Næringsliv, PA’s Knut Erlend Vik and Øystein Landgraff, business transformation experts, look at a number of Norwegian companies that have made radical moves in order to ensure their long-term survival.

Knut Erlend and Øystein explain that, due to its ‘oil fortune’, salaries in Norway are up to 70% higher than its EU trade partners, which can have a detrimental effect on large parts of Norway’s onshore operations. To offset this, many Norwegian companies are exporting areas of their business abroad in order to benefit from cheaper labour and emerging markets: “Producer of automotive parts, Kongsberg Automotive, entered into the Indian market for the first time in 2007, primarily to benefit from cheaper labour. With the acquisition of the US company GSM the year after, Kongsberg Automotive established its second factory in India, and with recent Indian contracts it looks like the Indian market is opening up.”

They comment that industries such as banking, insurance and telecoms are investigating the possibility of producing back-office services in countries with ultra-low production costs, far below those that you see in India.

According to Knut Erlend and Øystein, some companies have also managed to significant secure investment from larger foreign firms – they cite Kverneland and Sandefjord as examples.

Continuing, they explain how other Norwegian businesses have taken an innovative approach and drastically transformed their business models to win a larger share of the market: “Look at the publishing house Schibsted.  They are well on the way to success in the transition from printed to digital medias. The network-based advertising companies now represent more than one fourth of the turnover and more than half of the earnings.  Schibsted has around 30 advertising web sites all over the world, and is the leading web portal for real estate and second car sales in Italy, Austria, Ireland and Malaysia, among other countries.”

In conclusion, they comment: “We give too little credit to the companies that actually are transforming.  Norwegian companies should be inspired by them.”

PA Consulting Group in Norway

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