The term ‘economics’ comes from the Ancient Greek oikos, which means ‘house’ and nomos, which stand for ‘custom’ or ‘law’. In other words, economics is really a social science about the ‘rules of the house’. Macroeconomics, microeconomics, business economics, international business. House rules.
Smile or Not to Smile
The mandatory smile for Walmart employees was indicative of its international failure in Germany. The Chinese public did not quite get the do-it-yourself proposition by Home Depot. KLM Royal Dutch Airlines decided up-front that cultural differences were not going to be part of its merger efforts with Alitalia. To smile or not to smile, that is definitely the question.
Bridging House Rules
International expansion, whether it is growing organically or through mergers and acquisitions, requires companies to recognize that each country, every industry and all companies for that matter, have their own house rules. Understanding the clearly written rules and acknowledging the existence of ‘invisible’ cultural differences helps bridging those differences and enhances chances for success.
Flying Over the Gap
Of course, some companies succeeded with international expansion by flying over the gap. Energy drink Red Bull successfully launched in international markets through local grassroots branding as opposed to relying on ‘traditional’ mass-marketing campaigns or building partnerships with other local or international brands. However, not all companies have wings.
The Good Assumption
For international expansion to be successful, assuming that different house rules exist is a good assumption. That way companies with international ambitions can build strategies on solid ground. Assuming a gap allows for the possibility to build a bridge.