Decision and Planning to enter the U.S. Market
To make money in the U.S., you first need to find a U.S. specific value proposition which warrants a profitable price. This price, in turn will be affected by the competitive landscape in the U.S. How much territorial coverage will be required and where the office should be located will determine how much cash the company will expend before the U.S. operation becomes cash flow positive. To help you build this knowledge and facilitate your decision, we offer four services: Development of a Value Proposition specifically for the U.S. Market, Competitive Analysis, Market Mapping and Cash Flow Projections. You can purchase these services independently of each other, or the whole package at a 25% discount.
Value Proposition for the U.S. Market
Your value proposition and pricing will likely not hold in the U.S. Finding a value proposition that justifies an acceptable price to both parties should precede making the decision to enter the U.S. market as the strong selling points of your product in the home country might not be appreciated in the U.S.
Competitive Analysis
It is likely that the U.S. will have competitors with which you have no experience. Some will be global competitors familiar to you and some will be active mostly in the U.S. Entering the U.S. market successfully will require an understanding of your competition, its strengths and weaknesses, areas of focus, offerings and pricing strategy. The chart to the right illustrates how a company targeting the biggest market segment (#2) would go head to head with two established competitors while ignoring the virgin field of market #3. Market 3 would likely offer more freedom of product definition as well as pricing flexibility.
Market Mapping
Traveling between two small U.S. cities 3 time zones apart could take all day, coming and going. You will want to make sure that your resources are located where it makes sense for maximum productivity. Where professionals are available should also be considered as your company will probably recruit from the industry. Many industries are focused in a handful of locations and locating away from those will make it difficult to recruit professionals and management with the right skills and experience. You might further consider the tax and legal implications of each of these locations. In this service, we map the location of your market and quantify its size in various locations.
Cash Flow Projections
Entering the U.S. market will create two categories of costs: a cost of setting up shop and an on-going overhead cost that will repeat each year. Until the company generates enough revenue, the parent company will be funding this negative cash flow. If the company runs out of money before it can generate net income, all the funds invested in this enterprise will be lost. If the company has to proceed slowly because it cannot afford to hire a critical mass of resources, it will diminish its return on investment. Armed with informed estimates of what cash flows can be expected, the company can decide before hand if it should enter the U.S. market or find other ways to grow.
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