About Intedat 5. 4. 2024

When NACE is not enough…

The NACE classification is commonly used to classify companies into individual branches and can be a great helper for your business development. But sometimes it may not be enough. If you need a more detailed and accurate classification, we have a solution for you.

What is the NACE classification and what is its structure?

NACE (from the French Nomenclature générale des Activités économiques dans les Communautés Européennes ) is a statistical classification of economic activities that has been used by the European Union since 1970. In the Czech Republic, the national version known as CZ-NACE is used.

The aim of this classification is to ensure that economic data can be analyzed and compared at the level of the European Union and partially also internationally.

The structure of NACE

Sections (they are marked with the letters A–U, but they do not appear in the code itself)
Partitions (they are marked with a two-digit numerical code)
Groups (they are marked with a three-digit numerical code)
Classes (they are indicated by a four-digit numerical code)

Example

Section C = Manufacturing
Section 10 = Manufacture of food products
Group 10.1 = Processing and preservation of meat and production of meat products
Class 10.11 = Processing and preservation of meat, except poultry

If a company operates in different areas, it can be marked with several NACE codes.

Advantages and disadvantages of NACE

As we mentioned in the introduction, the NACE classification is an excellent tool for the business development of many companies. But it has its limits.

Advantages of NACE

Targeted outreach: NACE allows companies to be identified according to their field of activity. You can thus target your marketing and business activities to relevant groups of potential clients.
Market segmentation: Thanks to NACE, you can better understand the market structure, identify key segments and adapt your business strategy to the needs of specific industries.
Benchmarking and competitor analysis: The NACE classification makes it easy to compare your company’s performance with competitors within the same industry and identify new market opportunities.

Disadvantages of NACE

Generality of categories: The NACE classification may in some cases be too general and therefore may not sufficiently reflect the specific needs of individual businesses.
Out-of-date data: Information on the classification of businesses in NACE categories may not always be up-to-date, which can lead to outdated or inaccurate data.
Limitations for new branches: Newly emerging economic activities may not always be sufficiently covered by existing NACE categories, which can make their inclusion and analysis difficult.

We have selected two examples from our practice that demonstrate where index databases using the NACE classification run into their limitations and where Intedat offers significant added value.

1. Looking for fuse manufacturers

Client entry

Our client wanted to approach a fuse manufacturer in Germany with the offer of its products. So he was not only concerned with companies in a certain field, but with companies that produce a specific product.

NACE classification

Index databases built on the NACE classification will offer a list of companies based on the following item:

12 Production of electrical distribution and control equipment

But this class is quite comprehensive. According to the explanations to the NACE classification (PDF) from the Czech Statistical Office, it includes:

production of electrical circuit breakers
production of surge arresters (for voltage distribution level)
production of control panels for electricity distribution
production of electrical contactors and relays
production of cables for the electrical system of distribution boards
production of electrical fuses
production of switching devices
production of electrical switches and switches (except push-button switches, grid installation switches, lever switches, electromagnets with a switch)
production of a motor-generator driving machine

So, if we are satisfied with only the NACE classification when choosing companies, we will get a list of a huge number of manufacturers from the field of electrical engineering. However, not all of them have to be fuse manufacturers at the same time.

If the client decided to contact all these companies, it would be expensive , time-consuming and inefficient .

Intedat solution

At Intedat, we have our own company classification system, we use unique AI algorithms and we have experienced data analysts in our team. Thanks to this, we were able to provide the client with contacts exclusively for German companies that produce insurance policies .

The subsequent approach with an offer of cooperation was of course much more effective. The client only contacted companies with a high potential for cooperation .

2. Searching for bearing distributors

Client entry

In this case, the client wanted to approach bearing distributors (wholesalers) – mainly in Poland, but also in the Czech Republic and other countries. Again, he was not concerned with a general field, but with a specific product.

NACE classification

Even this time, the NACE classification did not offer what the client needed. The following categories are available there:

Class 28.15 (Manufacture of bearings, gears, gears and drive elements)
Section 46 (Wholesale trade, other than motor vehicles)

In the case of class 28.15, the problem is that it only covers bearing manufacturers, not their distributors/wholesalers.

Section 46 may look promising, especially group 46.6 (Wholesale of other machinery, equipment and accessories), or class 46.74 (Wholesale of hardware, plumbing and heating supplies).

The problem is that most companies that distribute bearings are not in these categories. Instead, you’ll find them under the label:

90 (Non-specialized wholesale)

Of course, this category does not allow you to find out exactly what the given company sells. Despite the standard NACE classification, it was therefore not possible to reach our client’s target group (distributors of bearings).

Intedat solution

Advanced filtering options in the Intedat application in combination with our other procedures were successful: For the client, we searched for companies that exactly met the set criteria, i.e. distributors of bearings in Poland and other countries .

Even in this case, it is understandable that the subsequent contact was much faster and more efficient.