Pret a Exporter: Crossing the Culture Gap
For any organisation looking to expand into a new territory, getting to know the lie of the land – the legal system, trading conditions, the competition and market opportunities – builds the first level of research. The second level: local knowledge, cultural factors, business etiquette and on-the-ground expert advice, is arguably even more critical to success.
As part of Brand Remedy’s participation in the GoToMarket USA seminar event on 6th September, we’ve explored below some of the intercultural challenges faced by firms as they look to expand to the US and beyond.
In Europe and the UK, we’re accustomed to varying degrees of regional differences and language in how we do business, depending on the industry and how much person-to-person interaction is needed. When Pret A Manger, the food retailer, launched in the French capital, the company faced the challenge of addressing the different eating habits between UK and Parisian consumers, not least disrupting the national breakfast tradition of grabbing a croissant and espresso. Pret also discovered that Parisians prefer having lunch in with others rather eating alone and tend to flock to larger, spacious branches rather than the smaller ‘pit stops’ which have driven the brand’s success in the UK.
Adapting a product or service to the cultural sensitivities of the market is integral to longer-term growth, but when preparing to launch a business, how do we consider the ‘hidden human’ aspects of intercultural differences?
From negotiating contracts to building business relationships, what are the potential pitfalls?
I put these questions to Miriam Edelman, an organisational psychologist experienced in intercultural advisory for global organisations and individuals, especially UK/US. Edelman cautions that it’s important to understand how we view the world through our own cultural lenses. ‘We can then look at a number of spectrums along which cultures vary, and can compare the positions of British culture versus those of the partner country,’ she explains. For instance, when looking at the US and the UK, Edelman suggests four differences that deserve focus:
- Communication: Despite (almost) the same language, this is often a problem. Americans often seem brash and abrupt to Brits; British reserve feels deceptive and untrustworthy to Yanks. Americans will say what they mean directly, without hints or minimisation, and expect the same.
- Decision-making: People are often surprised, given how informal Americans can be, that the business culture is quite respectful of authority. Brits, on the other hand, expect to be included and persuaded, in ways Americans may feel are excessive and even insubordinate.
- Strategy: Americans have faith in rationality and want to plan for the long term. Brits are skeptical of planning when uncontrollable events could intervene, and more likely to be intuitive in strategy.
- Outlook: ‘Have a nice day’ isn’t just a cliché; Americans generally do wish you well, and are optimistic. They also like to act fast; better to do something, even if it’s not perfect. Typical British cynicism can come off as nihilistic and unsupportive, and Americans may be impatient with a more cautious approach.
In other global markets, particularly in digitally-enabled industries, having an understanding of the local entrepreneurial culture can be vital.
British entrepreneurs might be able to learn a thing or two from entrepreneurs in other markets, such as Singapore.
Singaporean entrepreneurs have a very realistic understanding of what little financial reward they’ll get during the early years of start-up. In fact early-stage investor Paul Graham has created a term for it: ‘Ramen Profitability’. PwC also describes Singapore as a perfect fit for tech entrepreneurs, where people are attuned to intercultural sensitivities, stemming from a history of free trade and a population of largely immigrant communities.
From what we’ve learnt so far, it’s clear that the cultural divide between territories, if not understood, can derail the most strategic of market entry plans.
By 2025, 880,000 (17 per cent) British small businesses plan to expand overseas. Gaining insight on how other countries buy, sell, negotiate and behave in a business context is pretty fundamental – and key to leveraging ‘Brand UK’ in new markets.
Ultimately, it’s not just about being the same, but celebrating and respecting differences.