Product strategies of internationalizing design ventures: Case study of the American furniture and home décor market

Abstract

Internationalization of design companies is a current topic. Design is something Finland and Scandinavia are renowned for and it continues to be a key strategic area in country branding. The context of this thesis is the design industry in the United States, namely in the area of furniture and home décor. The aim of the study is to observe how internationalizing Finnish design companies adapt their product strategies to fit the conditions of the local target market. The views of selected Finnish design companies are reflected in the light of an analysis of the market characteristics of the American furniture and home décor market. Information has been collected both about the market infrastructure as well as about the consumer preferences - the values that consumers assign to design products in selected home interior blogs in the United States. Therefore the experiences of the companies will be observed against a wider context. In addition to examining the market characteristics' influence on product strategies, the study also addresses the issue of how organizational factors such as knowledge, networks and entrepreneurial orientation, might have led to the respective strategies of the case companies.

This study is qualitative in nature and utilizes multiple sources of information as a basis of analysis: market research, interviews and blog content analysis. My aim is to give a multi-faceted picture of a current topic and the study thus primarily contributes to the existing theoretical fields of international entrepreneurship and international design business management. The majority of the Finnish design companies are entrepreneurial in nature and operate with rather limited resources in their international efforts. Therefore the field of international entrepreneurship offers a potential ground for the study, even though not all companies interviewed are international new ventures in the traditional meaning of the concept.

The results of this study indicate that the design discourse between Scandinavia and the United States is rather universal at least what comes to the appreciation of minimalistic design. The United States is such a huge consumer market that Scandinavian design companies are able to find their fitting niches in the market. All in all, appreciation for minimalistic Scandinavian design seems to be on the rise and local competitors are also responding to the fragmentation of the consumer needs by creating their own respective modern design -inspired collections. The companies interviewed for this study did not either see the need to create specific differentiated products for the target market, but rather the need to adapt product design stemmed from other imperatives, such as legal and institutional requirements. However, it was acknowledged that differences in preferences do exist. On the other hand, while product adaptation for the local consumer preferences was not the most essential question, the discussion was centered on the differences in perceiving the role of design and the value behind it. Therefore Scandinavian design companies need to pay attention especially to the promotional adaptation of their products and tailoring their marketing activities to fit the local target market in the best possible manner.