Matching foreign language text

Kind of a general question this but how do people normally go about the problem of matching foreign language text in a database? I'm specifically using SQL Server but I get the impression the same problem applies to most databases.

For example, if Bj rn (apologies if ASCII can't handle that - this is Bjorn with two dots above the o) is stored in a table and you do a SQL search like:

SELECT People.*, People.Firstname
FROM People
WHERE (((People.Firstname) Like "*bjorn*"));

It won't find Bj rn's record.

I had two thoughts:

First duplicate all fields of this type but run each field through a MakeASCII routine which converts to plain ASCII.

Secondly implement my own fuzzy matching function. However, not sure if you can do this with SQL server, something like:

SELECT People.*, People.Firstname
FROM People
WHERE (((People.Firstname) FuzzyLike "*bjorn*"));

Any suggestions appreciated!

Cheers, Rob.

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