How to expand abroad if you have just established your business? Europe is not a single market and there are intense differences between its cultures, languages, and business etiquette. One of the most tempting markets is Germany, which is Europe's largest national economy. It is also known for having higher entry barriers with hierarchical layers within the decision structures of companies.
To help the startup companies to enter new markets Finpro and Management Events started a co-operation project this spring. Chosen Finnish startup-companies that are seeking new markets may participate at the Management Events business events targeted at high-profile decision makers. The first was held in Riga, Latvia, last April. The second event was Industrie 4.0 in Germany, where six companies were able to participate. The project will continue during 2016 with carefully targeted Nordic events and also with one German event: Automotive.
“Germany is an advanced industrial country, which constantly seeks new technological solutions. We are able to provide German companies with wireless technology to add into their products and solutions,” Jyrki Suutari, Sales Director, Haltian Ltd.
As the German economy is strong, markets are growing, and companies are investing into business, it is a good time to enter the market.
“Germany is investing in the rationalization of industry, we see the huge potential of location technologies for production and logistics processes,” says Thomas Hasselman, CMO, Quuppa Ltd.
When planning to enter a new market, a startup company needs to determine its target markets based on market opportunity, ability to access the market, and finally, their ability to sell, deliver and support the market. The business climate of the target market is also important to consider.
There are some cultural similarities between Germany and the Nordic countries. Both Scandinavians and Germans are task-oriented and value credibility, punctuality, and directness of communication. However, the informal Nordic business etiquette differs from the German’s more traditional one. For example, German decision makers are difficult to reach by phone and are reluctant to meet unknown companies. The decision making process takes also much longer as structures and rules are highly appreciated.
That is why the face-to-face contacts have an immensely important role. Basically, they are ways to create credibility among top decision makers.
“The key benefit of attending the Industrie 4.o event is to meet a group of companies with needs for our technology in a short period of time. It is a huge challenge for a small Finnish company to negotiate with big German industry companies on its own. The event was valuable enough to attract key players and create good conditions to start conversations with,” Jyrki Suutari summarizes.
High-class business events may be the missing link between the busy decision makers and enthusiastic startup companies, as those provide both parties a natural way to get to know each other.
“It was a positive surprise that so many companies proactively approached us and asked for a meeting. It seems that companies do value the quality and the Finnish know-how,” Thomas Hasselman explains.
Finpro helps Finnish SMEs go international, encourages foreign direct investment in Finland, and promotes tourism. To support international growth of Finnish companies Finpro operates several Team Finland Growth Programs. The goal of these programs is to boost internationalization of Finnish SMEs.
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