Your EU expansion strategy can be gradual or aggressive, depending on your business goals and objectives. In developing this strategy, here’s what to consider.
Establish a Presence
If you are new to the international marketplace, or are otherwise looking to have a conservative expansion strategy, the easiest way to launch into Europe is to simply establish a presence in any European country.
Establishing a European presence provides an inroad to a huge consumer base, enhances company credibility and leads to the possibility of further expansion.
Establishing a presence requires minimal startup time and resources.
The primary ways to establish a presence include collaborating with various outsourcing partners, establishing strategic alliances and creating a virtual sales network by working with independent sales representatives.
Establish a Network
A slightly more aggressive expansion approach is to establish an EU-based network. This can be accomplished by building a distribution system, developing certain types of licensing structures or by creating a direct sales and marketing force.
Creating a distribution system to harness the potential of the EU marketplace can be a particularly effective way to expand internationally.
Most Europeans, particularly those in the new EU countries who have been longing for U.S. goods and technology during their past economic struggles, are extremely receptive to distribution (or licensing) arrangements and now have the cash and resources to proceed.
Establish Your Operations
One of the most aggressive — and potentially most rewarding — methods of entering the EU marketplace is by establishing European operations.
This can be done by finding a joint venture partner, acquiring a company in a similar market, acquiring a company who can provide raw materials or is otherwise complimentary in nature, or by establishing your own operations in Europe.
According to the Central and Eastern European Business Information Center, the best prospects for U.S. companies to expand their business in the manufacturing arena include general manufacturing technology, construction equipment, food processing machinery, heating and air conditioning equipment, and power generation equipment.
Recognize the Benefits
The 10 new EU countries — and the entire EU market — present tremendous opportunities to U.S. businesses looking to either establish a presence, capitalize on licensing and distribution possibilities, or expand operations.
Given the high rate of economic growth and the financial strength of the EU, for those forward-thinking companies that understand the power and possibility involved in a marketplace of 450 million people, now is the perfect time to look across the pond.
Kobe Bogaert and Tisha P. DeRaimo are principals of Alea Global Strategies, a San Diego-based company that specializes in creating and implementing international corporate operations and infrastructure for U.S. businesses in Europe. DeRaimo is also an intellectual property attorney. They can be reached at (858) 945-1904.
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