Internationalization in France

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There are several cultural barriers and differences to consider before Aveda decides to enter France. Most of the country speaks French and likes to be spoken to in French. It is important that the pioneer leaders and employees that lead Aveda into France learn a little understanding of the language and how to hold small conversation. It is also recommended that they use translators to ensure the language barrier protects both the company and the countries best interests. The French tend to not welcome foreigners very well. French laïcité is the idea that a person cannot display their religious preferences publicly. This would be an issue for certain religions that require full headdresses, as this is banned in France. In business relations, the French have a severe sense of uncertainty. They do not like to take risks and like to stick to the safe ways of doing business. Men and women are considered equal in most businesses in France, even foreign women. French men tend to be very suave and flirt with females that they work with. It should be appreciated but sexual harassment is never tolerated. A couple kisses on the cheek is considered as a proper greeting in France, unlike the handshake. Flaunting wealth and inquiring about other’s wealth is considered distasteful and inappropriate.

Internal Analysis

In regard to internationalization, it is important for Aveda to conduct a SWOT analysis in order to better understand their strengths, weaknesses, opportunities, and threats in their industry. This gives them a way to assess the things that they have working for them and ways they can improve in order to better compete with their competition in an ever-growing market.

Strengths:

- Domestic brand awareness

- Proof of concept

- Premium products align with target market

- Organic and environmentally products

Weaknesses:

- Little experience with foreign investments

- Numerous competitors in market

- Many competitors began in the French market or already have several years of experience in the global market

- Cheaper alternatives

Opportunities:

- Expand globally into new markets

- Growth and profitability

Threats:

- Competing with more markets

- Political risks

- Cultural risks

The organizational structure of a company is the relationships of leaders in the firm that connect each of their positions which makes the company run. There are two different approaches to the organizational structure that companies can take. The centralized approach is where headquarters and its leaders dictate what happens with global affairs and expansion. The decentralized approach is where all of the global decision making is put in the hands of people in the country that want to make the product more localized. This approach is utilized when the decision makers have a profound understanding of the market that they are trying to enter. The more global growth a company goes through, the more extensive these organizational structures can become. Because Aveda has little experience in the international market, they would want to start with a more centralized approach with the team of decision makers that they already have. Once they start to do more research and development in France and in Europe, they should create a international division structure which, under the supervision of the CEO, they would be able to be concentrated on only international affairs.

Implementation Issues

Besides capital and people, it also takes time and patience for companies to internationalize. Once a company establishes themselves in their home country, the question of going global becomes an idea. Aveda’s potential to go abroad would take years of research, development, implementation, construction, distribution, and more research to ensure that the company can survive in France. The first thing they should do is create an international business plan to outline all their global objectives that they want to achieve by entering into France. They then should conduct thorough research on their market in the country. They need to figure out who is their target customer, how are they going to distribute their product, what are all the cultural, political, and currency risks that may arise. They then need to be in contact with the government on how they are going to import their products and what licenses and permits they need to obtain to begin work in France. At this step, they may also want to consider looking for financial assistance in France so that they can get extra funding for expanding into the country. Aveda needs to make sure that all their products have all of the legal labels and warnings on their products to ensure that they pass government requirements. Once they have their products ready from manufacturing, they need to find a global distributor. They would then sell their products to the distributor, who will in turn sell their products to wholesalers and retailers.

The best entry mode for Aveda to enter France is as a foreign distributor. This is a intermediary that is under contract to export the company’s products and distribute them into the foreign market. They foreign distributor does all of the marketing and promotion for the company. This is idea for Aveda because since their products are typically sold in salons and high-end beauty supply stores, Aveda can hire these foreign distributors to put them in the target stores in the French market.

Conclusion

Aveda has set itself up as a leading cosmetic and beauty company in the United States. The proof of concept and rate of success in the United States allows for a perfect opportunity to go global. France is the perfect company for Aveda to expand into because of the ideal target markets and ease of entry. While cultural risks arise with the French uneasiness of foreigners, Aveda beauty products are attractive to the French culture as premium, organic cosmetic products. Competition in France should be one of Aveda’s biggest concern, however, it can be the next trendy cosmetic line in Europe with its unique approach to the use of all organic