Five common challenges for Finnish companies to break into the US market

How to overcome the challenges of succeeding in the US market

Regina Casteleijn-Osorno, 24.11.2017

The US market is notoriously difficult to penetrate. Armed with their unique type of Finnish spirit ‘sisu’ (roughly translated as resilience, bravery, guts and determination), Finnish companies find ways to overcome the challenges in order to succeed. We specifically look at how differences in culture, expectations and working style can have a significant impact on success.

Success in Finland, regardless of which industry the brand is represented in, does not ensure immediate acceptance and success abroad. Here, we have identified five specific challenges that may hinder companies when trying to increase their footprint in US markets.

1. Strategic changes for success

The first thing any company needs to consider when trying to enter any foreign market is a re-vamping of the current company strategy. Strategies that worked to make a brand successful in the Finnish market will not necessarily work in the type of fast-paced, high turnover, 24/7 culture that exists in the USA.

Re-evaluating the basic strategy, which includes the shorter product life cycles and aggressive competition associated with US markets, is something Finnish companies have to overcome when attempting expansion. It is often only after a product has failed that the strategy is re-evaluated, but then it might be too late.

2. Location matters

Second to the strategy is the new home base of the company itself. The phrase, ‘location, location, location’ is often said about real estate, but what does it really mean for Finnish companies wanting to establish a foothold in the US? Finding the best location possible, staffed with at least one local person, is one of the basics that many foreign companies neglect. Often, Finnish companies have a vision of being in a certain location such as the west coast, without thinking about the time differences with Finland.

Considering how a time difference of 10 hours will impact daily business relations is vital. Looking at necessity vs the desire of being in a certain area, proximity to partners, and future development plans before breaking ground is paramount for avoiding having to relocate later. And we should not forget e-commerce, which makes competition even fiercer. Naturally e-commerce does not mean the complete disappearance of bricks-and-mortar business, but it has to be considered as an influence on the entire business.

3. Local staff = trust building

Once the location has been established, the third challenge is staffing the new office. Failing to consider hiring local staff, with the rationale that it will save on costs, can have serious implications. Locally hired staff are by their very nature knowledgeable about local regulations and policies as well as local culture, which differs vastly across the states. There is indeed no one size fits all when it comes to the US markets, and understanding the differences between people and cultures is essential and not cannot be learned from textbooks.

Locally hired staff might appear to be a waste of money from the viewpoint of feet firmly planted on Finnish soil, but local staff can gain the initial trust of customers and partners much more easily than Finns approaching the same people on their own.

4. Product/service adaptation

The fourth challenge is to realize that nearly every business in the world already exists in the USA, and although the product(s) or service that you create are successful within Finland, they may not be at all interesting for US consumers. Changes may need to be made to the product or service to make it more desirable for the US market. Simple changes to tangible products such as color, flavor or texture might make the difference between success and failure. Willingness to adapt or alter your product/service should be considered before attempting a move into the US market. Customers are outspoken and will not be afraid to tell you why your product/service is not desirable in the US. If you are unwilling to alter, modify or outright change your product, entering the market may easily end up in failure.

5. Standing out by telling powerful stories

Last, but certainly not least, the fifth challenge is standing out from the crowd. Highlighting the origin of your product/service, with an emphasis on the brand story, history, design, quality and values, could be the biggest selling point. These help to set you apart from other similar products, of which—being the US—there will be many. Do not forget to leverage the unique factors that many Finnish brands have behind their products, nor to separate yourself from others by highlighting the key elements of why your product is special.

All in all, none of these challenges are different to anything we have already heard. When it comes to any business the same points are equally valid. The fact that one company can go from being widely loved and successful in their home location to invisible in another, is the result of many factors. It is a matter not only of attracting business through the right channels, but also doing your homework on the new market, choosing the right location, and sharing in the willingness to adapt your product or service—as well as sisu and a little bit of luck!

Regina Casteleijn-Osorno is a Program Manager at Aalto EE. Design for Success – Finnish Brands to the US Market project is helping renowned Finnish companies to strengthen their foothold in the US market. Read more.

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