Brandinavia: Why Nordic Brands Rule

How did this small geographic area in northern Europe, comprised of countries with little political capital, become such a branding powerhouse? The story starts around AD 900, according to the book The Viking Manifesto: The Scandinavian Approach to Business and Blasphemy by Steve Strid and Claes Andreasson (Marshall Cavendish, 2008). The authors point to the Vikings as the admittedly barbaric forerunners of contemporary Vikings: “The Viking is more soft spoken, but alive and well. Without any army to speak of, they still invade with a better idea and a new approach to marketing, advertising, culture and corporate culture.” The book’s premise is interesting: that the Viking philosophy survived and has been updated, resulting in modern business success.

With this concept in mind, it is useful to take a look at modern Scandinavia. Each country has a unique culture, of course, but they are all bound by their Nordic roots and their belief in socialist democracy. Scandinavian countries support their citizens from cradle to grave. A high standard of living, free health care, free higher education and government-supported retraining in the event of job loss are all components of the social system. It comes at a steep price, however: personal tax rates can reach 50 percent or 60 percent. What does this have to do with brands? Since people are essentially taken care of, the countries can focus on commercial issues. Corporate tax rates are low, and Scandinavian governments encourage investment and foster business growth. Scandinavian companies aggressively export their products, and that means they need to compete effectively on the world stage. Having the ability to compete is one thing, but the real question is, can you make something the world wants to buy? Here, Nordic brands have excelled. As a region, Scandinavia has become known as a center of good design. As early as the 1950s, “Scandinavian design” emerged as a defined style. While the term primarily applies to furniture, Scandinavian design represents a larger movement reflected in simplicity and elegance of design along with a focus on affordable functionality. Outstanding design remains a cornerstone of Scandinavian brands today, whether it is the clean cleverness of the Absolut vodka advertising campaign, the brilliant interconnectivity of LEGO pieces or the streamlined beauty of IKEA furniture. Just as important, makers of Scandinavian brands have been exceptionally innovative. The Swedish vodka Absolut entered a marketplace dominated by Russian vodkas, not by creating a superior product, but by introducing breakthrough packaging. Absolut produced upwards of 1,400 individual ads focusing on the clear bottle itself in a campaign that won more than 350 awards worldwide, catapulting the vodka to its position as the third largest premium spirit in the world. The Finnish company Nokia, which resulted from the merger of a rubber and cable company in 1967, created the first car phones in 1982, designed to run on the world’s first international cellular network, Nordic Mobile Telephone. By 1998, Nokia was the world leader in mobile phones. Nokia was ranked fifth in the 2008 Best Global Brands list. Pharmaceutical company Novo Nordisk, created through a 1989 merger of two Danish companies, is a relatively small, niche-focused company on the world stage. But the company, known for its social and environmental responsibility, created the world’s first insulin preparation identical to human insulin and now does business in 80 countries worldwide. The Norwegian cheese brand Jarlsberg began modern production in 1956, based on a recipe from 1830. This distinctively flavored, medium-fat cheese with holes has become a major export success story. Jarlsberg is now exported to Australia, Canada, the EU and the United States, where it has become the number-one brand of specialty cheese. Arguably, the most prolific producer of word-class Nordic brands is Sweden. Swedish brands include Absolut, Astra (which merged to become AstraZeneca), Brio, Ericsson, H&M, IKEA, Saab, Scania and Volvo. And let’s not forget the renowned band brand ABBA, recently rejuvenated by the hit movie Mama Mia! One reason there are so many well-known Swedish brands is that Sweden is simply more aggressive than its Nordic brethren, according to Nicholas Ind, author of the book Living the Brand (Third Edition, Kogan Page, 2007). In a 2002 article comparing Norwegian and Swedish brands, Ind says, “…as soon as they have a good business base within Sweden they look to capitalize on the growing power of their brands. In many cases this is surprising, because internationally there have been no historic associations with Swedish vodka or clothing. Rather these brands, often in their own idiosyncratic way, have established markets that no one knew existed.”
	But don’t count out the other Scandinavian countries. “In Finland, we love brands,” says Alexander Stubb, a member of the European Parliament, in a December 2007 interview withBlue Wings magazine. He says Finnish brands, regardless of industry, have three things in common: “They are good products. They have an interesting story to tell. They know how to market their products.” Stubb sees “a bright international future for many Finnish brands” because traditional brands such as Marimekko “are in the middle of a generational shift in their management. The 30- and 40-somethings have been brought up in an open, international market. They have studied and worked abroad before taking over major companies in Finland.” Scandinavian brands occasionally compete with one another on the world stage, but it seems as if their common heritage and close geographic proximity keep these countries well-grounded and cooperative. After World War II, for example, the national airlines of Denmark, Norway and Sweden agreed to form a uniquely regional carrier called Scandinavian Airlines, which later became SAS. While SAS was for decades a major international carrier, it has had its share of economic troubles in recent years. Still, it remains the largest airline and travel group in the Nordic countries and owns four airlines. Scandinavia itself has not been unaffected by the world’s economic ills either. In fact, while the United States has dominated headlines, Iceland had its own version of a banking meltdown recently. The other four Nordic countries came to their brethren’s aid with a US$ 2.5 billion loan, which was added to a US$ 2 billion loan from the International Monetary Fund. Iceland got some much-needed relief. It is apparent that even in the face of a catastrophic crisis, Vikings stick together.