For companies located outside of the United States with plans to grow, entering the U.S. market is an important part of any long term business strategy.
For American firms, the domestic market can offer substantial opportunities. North America should probably be the first market of choice, for most firms.
The United States is probably the most dynamic and possibly lucrative market in the world. In fact, combined with Canada and Mexico, the region will possibly be the main economic driver of the world in the 21st century.
Despite the back and forth and the re-negotiation of NAFTA, these three are deeply integrated markets. There is individual strength in each of the three individual economies and technology innovation that filters throughout North America.
The USA economy has numerous profound advantages, including a strong culture of entrepreneurialism, and innovation, a liberal business climate, very strong and flexible capital markets, and a vibrant small business community that creates and capitalizes on technology.
Canada has one of the strongest banking systems in the world and is strong in energy. Mexico has achieved some macroeconomic stability, and while there is still a way to go, has initiated reforms to stabilize that further. It remains a manufacturing powerhouse.
Overseas, there are issues. China’s economy is slowing, and faces demographic issues, increasing labor costs, huge debt, and pollution. India still needs to enact reforms that will allow for growth.
Japan has made progress. But reforms to increase competition and change corporate practices have yet to really take hold. Japan’s demographic issues are profound and a major issue.
I believe that the USA remains the best market for a business to achieve growth. It is a mistake for any non-American company looking to grow substantially and not consider the USA and North America. There are issues for sure, but the USA is probably best positioned of any market.
The U.S. market is very large but not homogenous. Any new market entrant to the USA needs to be aware of differences in the market.
The rewards of a successful U.S. presence can be extremely rewarding and lucrative. Looking to the USA for expansion is a very logical decision for both American and many non-USA companies.
Commercial success for a foreign company in the USA relies on several factors. Among these are a strong product, a comprehensive market entry strategy, cost-effective operations, and an effective distribution and sales network. And don’t underestimate cultural differences. Sometimes seemingly minor cultural practices – simple things – can cause disruption and even failure.
Many companies fail in their attempt to enter the U.S. market because one or several factors were overlooked or underestimated.
But in most cases, these companies fail because of their lack of a clear market entry plan and a lack of experience in the U.S. market resulting in an inferior execution of the entry strategy.
Over the years, Alteris LLC has helped clients across a broad range of industries from many different locations to address multiple strategic market entry issues. Clients have included everything from early-stage companies to Fortune 100-sized firms. My comments above are based on this experience.
Regardless of the country, I am a believer that it is necessary to work with local people when entering a new market. They will understand the nuances of working with others of the same culture and region. They can advise on how to avoid potential minefields.
Often, this means using a local consulting firm. The way that relationship is managed has an impact on success too. A true client relationship is a long-term partnership. Your local partner (employee?) should work with you not only to understand your global business goals but also to understand each facet of your business.
I believe the only way to truly achieve success is to possess an operational and functional knowledge of your business while understanding how those attributes will fit into the new culture. That statement applies to any new market you are attempting to enter, not just North America.
