The potential of the US market is unmistakable, but too many Nordic-based companies do not profit enough from their American ventures. Success in the US does not come without backbreaking efforts, and many companies lack the courage to go all in when standing on the threshold of the biggest market in the world. This is one of the conclusions of this year’s QVARTZ Barometer.
So what is the formula for success in the US market? According to 10 top executives of Nordic-based companies, operating in the US takes: huge commitment, willingness to invest from the Nordic base, steel-eyed focus on customer service as well as the ability to attract and retain skilled employees.
Courage and cash
Entering the US market is not the hard part; being persistent and growing the bottom line is. Companies that focus on being successful in the US must be prepared to take risks and back up the business with up with heavy investments. “Don’t believe that the strategy which put you in the European market will have the same success in the US market. The levers needed to make it here are completely different”, says Alex Myers, CEO of ArjoHuntleigh. Also, it can be a challenge to convince the headquarters what it takes to gain a solid position in the US where the demand and expectations to for example customer service, salaries and short delivery time are different and much higher than in Europe. “The customers in the US have such high expectations when it comes to customer service. This requires dedicated resources from the headquarters and skilled, local employees”, says Susie Møller Hjorth, President of Arla Foods, North America.
You cannot do it on your own
Having solid backup from the headquarters is stressed as especially important. Rasmus Børsting, Executive Director of Oticon Inc., US, explains: “My best piece of advice to become successful in the US: gain the respect of the headquarters by means of effective execution, and get the right elbow room”. Often, the Board and management prefer a more prudent approach, but the top executives agree that this is not enough. Some of the smaller companies have felt on their own flesh how hard it is to get a foothold in the US. “Our biggest mistake was to insist on being Danes in the US for too long, and for too long we thought we could handle the US market on our own. We have been working very hard on getting better at focusing on the final, long-term objectives and defining what it takes to get there and at what price”, says Sebastian Jespersen, CEO of Vertic.
However, many companies have realised that they need to apply a much more professional approach when entering the US market. Consul General of Denmark in New York, Jarl Frijs-Madsen explains: “At a strategic level the companies apply a more professional approach […] and therefore, many avoid repeating past mistakes by devoting too scarce resources and lacking a clear strategy”. Indeed, it is possible for Nordic companies to tap into the potential of the US market, but it takes meticulous planning, investments and full-hearted dedication from the homeland.
The panel was facilitated by Anders Bruhn, Partner in QVARTZ, with participation from Partners Niels Reiff Koggersbøl and Thomas Holm Møller.
The QVARTZ Barometer was printed in Børsen’s Top1000 magazine on September 26, 2013. The participants of the panel debate were: Alex Myers from ArjoHuntleigh, Christian Madsbjerg from Red Associates, David Obel Rosenkvist from Fritz Hansen, Jarl Frijs-Madsen from the Consulate General of Denmark, New York, Jens Ole Hansen from COWI, Mikael Olesen from Leman, Rasmus Børsting from Oticon Inc., Sebastian Jespersen from Vertic, Sheela Maini Søgaard from BIG and Susie Møller Hjorth from Arla Foods