Daring digital ventures pave the way for Danish SMEs in the USA
These days, many Danish companies are eying the American market. In February this year, Danish Industry announced that the USA has taken over Germany’s position as Denmark’s largest export market and most important trading ally. However, this does not mean that the United States is an easy market to penetrate. It takes extra effort to make it there.
If your business already has significant trade in the USA or even a Danish subsidiary, some business practices may seem old-fashioned compared to Denmark. In the states, payment by check is still a preferred means of payment. That said, there is a high level of digital maturity in the US, which means that Americans have high digital expectations. They require streamlined digital journeys and expect to be able to manage everything themselves. American businesses and customers are relatively impatient compared to Danish ones, and we have observed that Danish businesses are trailing behind, especially the SMEs that target the B2B market.
The good news is that Danish SMEs have every opportunity to enter the American market if they are able to increase their digital capacity. It is essential to have an efficient, executable IT strategy for all digital aspects of the business.
Last week ITB, the Danish IT industry association, submitted twelve proposals to the Danish Business Authority (Erhvervsstyrelsen) that will help small Danish companies with a digital reboot. There is an increase in demand due to more work being done remotely.
In Denmark, we need initiatives that help SMEs increase their digital capacity. SMEs must also take on greater responsibility to prioritize this, especially if the goal is to tap into the huge American market.
Automated, standard digital products are the way forward
Danish companies consult Charlotte Nytoft when exploring opportunities in the USA. Not only was she based there for ten years, she also worked as an employee of the State Department at The Trade Council (the Danish trade council in North America) for eight years. She now works as an independent export adviser with the United States as her area of expertise.
Charlotte shares a number of recommendations for Danish SMEs who wish to enter the American market. First and foremost, she recommends that SMEs enter the American market with only one or a few products and that they are fully standardized, digitized and automated.
In Denmark, we often distance ourselves from standard products because we make a virtue of delivering customized solutions. In the US, however, standard products can be the right entry into the market. The best starting point for Danish SMEs is typically to select a single product that has sold well in Denmark and then transform this into a standard product that can be fully standardized, digitized, and automated. It requires a digital maturity that many SMVs do not possess today.
Charlotte Nytoft
Suppose you want to achieve success in the American market. Getting your website professionally translated into English and then marketing your entire product range based on the same motto that worked in the Danish or European market is not enough. But that is the pitfall that many Danish SMEs fall into, Nyfoft continues.
According to Charlotte Nyfoft, the way for Danish SMEs to make progress in the USA is to make a much greater effort to understand the Americans’ digital, cultural, and structural behavior.
Digital communities based in the United States have a longer tradition of getting information about products and goods through recommendations from peers or influencers, or on special social platforms, or on Amazon, which has already overtaken Google as the most popular search engine for seeking product information. It may not be smart to invest all your money on Google SEO and Facebook advertising in the states just because that strategy was successful in Denmark. As a Danish SME, breaking through in the USA requires having a digital business model that takes into account the behavior of Americans when it comes to the product in question and having a deep understanding of the specific challenges that the product solves in an American context.
Charlotte Nytoft
In other words, it is important to understand how the needs associated with your company’s unique product may be completely different among American customers because their context is completely different. Attention must be paid to validating and rethinking value proportions both traditionally and digitally.
Success in the States depends on strategic digitization
Charlotte Nytoft and I are fully aligned on these central points. If your Danish company is preparing to establish a presence in the American market, or if you are based in the states and need a digital boost, Charlotte is an exceptional source of information about the transformations that are crucial for success in the American market.
This raises a couple of critical questions.
How do you carry out a successful digital transformation within your organization?
How do you do it commercially?
First and foremost, it requires a digital IT strategy that ensures that the digital and the commercial elements are always connected. They are interdependent elements of your business strategy.
To succeed in the States, the digital and the commercial elements must be fully integrated. An executable IT strategy is the solid foundation you need to have in place before you build your business overseas.
Kristian Sørensen
Six digital strategic focus points for Danish SMEs
Here are six focus points that can help Danish SMEs achieve greater success in the US market.
Develop an executable IT strategy and build a solid digital and commercial foundation.
1: Define digital settings and direction
The ability to look three years into the future is long gone, if it ever even existed. The ability to develop and express strategic goals, principles, and boundaries as part of an IT strategy is more important than ever. The world is constantly changing and that includes digital business opportunities. Technologies must be kept up to date and constantly available.
What is do you dream of achieving in the US commercially? How can technology help you realize your dream?
2: Map digital channels and value propositions
We have to meet the customers where they’re at. You have to communicate the value of your product or service in the language of your target market. American culture, practices and regulations mean that what are value drivers for customers in the States are usually different from value drivers in a Danish or a European context.
Where do American customers seek information about the solution to their problem? How do they find products or services that deliver the solution? Which digital forums are relevant? Which “pains points” does your company’s product help to solve in an American context? How can your company use consumer knowledge content to attract target customers?
3: Strategic choice of technologies and partners
Which relevant technologies make it possible for your business to meet the demands of the US market? What requirements do American customers have concerning data, integrations, and availability when it comes to our unique product? How do we best meet their needs?
It is essential to choose strategic technologies and partners who understand your company’s needs in the USA. You have to ensure that they are able to support your growth and not inhibit it.
4: Digitize the customer journey and automate to the fullest extent
Analyze the customer journey and map the different routes and destinations in detail. How can it be digitized and automated to the greatest extent, so it meets the customers’ demands for self-service? How do we remove obstacles from the customer journey and make the shopping experience safe, easy, and attractive for the buyer? This can be through methods such as digital conferences, product configuration, and customization? How do we utilize digital tools in communication with our customers? Many Americans are willing to interact digitally using the latest digital tools – even at initial contact.
5: Discover the digital potential in the life cycle of your product or service
When the customer journey is anticipated to result in a sale, the product lives on afterward. You must explore the digital potential that exists in relation to supporting the life cycle of your product or service. What can we offer the customers? What advantages can we gain in a market where our relationships with customers are not as close as the relationships we have with Danish customers?
6: Make the IT strategy easy to execute
A successful IT strategy is more than a sum of the five points listed above. It has to be executed by managers and employees working in a busy, constantly changing reality. It is crucial that the strategy is kept simple, clear, and action-oriented, so that the individual manager and employee can effortlessly make the right decisions in a pressured and turbulent everyday life. It is also important that the management takes ownership of the strategy by continuously monitoring the implementation of the strategic initiatives.
