Dear Sir,
You are absolutely right any global company must target in the U.S market to get a global recognition.
This may be the following reason for which targeting or penetrating the U.S. market is so important.

1. Technology: Any technology developed in India, China, Japan, South Korea the technological acumen has to be get recognized by the U.S. market or at least the U.S companies/customers should approve it and use it for their own domestic consumption.
Take the example if INFOSYS, Wipro, TCS, Alibaba.com, Samsung, LG, Toyota to name a few all these major Indian, Chinese, Korean, Japanese player’s approximate 60% plus business revenues come from North America.
In Pharmacy/Life Science business Indian pharmacy companies like Ranbaxy, Dr Reddy, Cipla buying laboratories and R&D facilities in U.S. The molecules that are developed must pass through the FDA, once the U.S market accepts it, then it become easier to get a global market share. Many Asian companies keep in mind the U.S market and develop products and services
It the high and stringent quality control the U.S. maintain which helps the companies to rectify, value add to the product and services that it offers in the global market place.
2.Commercial Systems and Market Size: The transparency in the commercial transaction is well approved in U.S. The insurance system, accounting and auditing practice and the legal systems are in right place and works properly in U.S. The IP Act and the patent Laws are well defined and are strictly followed. Reverse engineering and piracy are criminal offence in U.S. Firms R&D expenditure is protected and can be easily ploughed back if the products start selling in U.S. market.
As you rightly said the U.S market size is so massive it is always proper to approach the U.S. market. Any firm get a miniscule of the U.S market share is a great success for it.
3.Product Acceptance: America is a land of innovation; they are always ready to accept the new products. Sony's miniaturization of TV sets, handy cam, IPTV, Toshiba’s Laptop PC was first marketed in U.S, outside the domestic market.
4. High Spending Economy: The U.S. economy is a high spending economy; product and services can be sold at premium or at volume.
5. Robust Stock /Financial Market: ADR is an attractive proposition for all financially starved companies that are technically sound, idea rich companies outside U.S.
Getting listed in the NYSE is a matter of prestige for any non U.S companies.

Aggressive marketing strategies are required to get small pie in the U.S. market. Sometimes by penetrations pricing strategy, innovative product strategy, excellent after pre sales and after sales strategy.
Your comments on this please.
Debashish Bramah.

John,

It is an excellent article , giving insight for "Situational Stategies" may vary but from situation to situation but will lead to common goal. My understanding on Royal Bank of Scotland is as follows.The very essence of having a regional bank still in existence in local support , trust an accessibility. Royal Bank of Scotland’s strategy has really helped to with the mass and at the same time excellence thru process improvement. It’s like believing in the “Quality of the Quantity”.

Nice article. But how come you can miss out Toyota.

Dear Sir,
Overall article is good.
In my opinion US market is considered more as a challenge for industries which are now focusing global market. You just can’t ignore US market despite recession as at the same time it provides you the lot of potential in itself.
Automobiles, outsourcing, technology, banking are few major business areas in which US market is best place to be around the globe. But truly global company has to focus across the globe keeping US in the priority list." Never keep all your eggs in the same basket "is an old saying but still it seems true today .Companies which only focused on US market are in bad shape today when US is considered to be in recession.

Best regards
Abhi

The attractive nature of USA markets is the ability of policy makers to make most of the little things brought by innovators on the markets. From hi-tech gadgets to super computing hardware to name a few ,software etc they are all embedded with global compatability consumer needs. Therefore it is worth for an individual to pay for durabiity therefore manufactures tend to emphasize on growth and continued supply of goods. As an investor with a desire to work with best players in the industry my humble beginnings would entail a superb understanding of the best and common reliable brands. The reason why I love Mcdonalds is the supreme nature of its character products. With time factor since inception and existence as business its history squarely resembles dominance not of manipulation of standards and law but by simple design of branding advertising.
As an Investor with a desire to explore and maximise returns for opportunities in paying off markets. The efficiency of the qoutes and their earnings is the grass roots governance of corporates, the fundamentals of free economic market systems coupled with research and development. Over the counter shares seems plausible for best performers with liquidity I would go for the auto qoute.

Dear JOHN
A shared services approach in business processes capitualises fundamentals of free market systems to robust growth in all sectors of the US markets. A strong US Dollar policy with high perfoming financial instituions drives real growth for ROI and real shareholder value advances in perfect competition system on probality that measurements and tests done for capital flaw. Despite massive write downs in Bears Sterns, Citigroup, JP Morgan Chase, BOA and other major banks, strong governance and openness and standards compliance observably government attraction to finacial instituions, customer relationship management, E commerce and stakeholders management. A good example the "Economic Stimulus Package" determination for success.

Tesco like Marks & Spencers before them, will have an uphill struggle. I think a lot of this has to do with their entry strategies. M & S did comparatively well because they sold their goods as quality products- indeed going more up market than in the domestic market. In the case of Tesco they are likely at first to benefit from the "European" or exotic novelty factor, but once that is gone, consumers will want to know whether they are high-quality, quality, middle of the road, discount, or super-cheap. Here I feel will be their downfall, because of distribution lines in the US and import costs, they will not be able to compete against local super-markets for basics and their assortment and value proposition will be either unable to deliver on its promises or simply confusing for consumers who are more directed in shopping.

Each situation entering the US market is different. But one thing that is consistent is that your firm must have a compelling value proposition that is unique and different. From New Zealand, we have hundreds of biotech, IT electronics and software companies, and speciality manufacturers that are gaining traction in the US. How? They focus on niche markets, not in Los Angeles or New York, but in Portland, Atlanta, and San Diego. They hire US management teams; build collaborative partnerships; focus on their key customers; and gain trust by delivering on their word. They build in New Zealand and the US. They have one shot at it: if they don't get it right, it's history.

Companies like, Fisher & Paykel (building double draw dish washers under the Whirpool name; Navman with it's in vehicle GPS and GPRS tracting systems (entered through previous owner Brunswick Corp.); Aftermail software, Zero Software, Peace Software, and Software of Excellence all by finding key strategic partners, some who became their parent corporations.

Humanware, makes visual impaired devices in Christchurch, NZ and Canada - for the US market.

KEY: Do your homework! Know the competition; and capture key markets where you can be #1.

Formula for Success: 3 x 3 x .5 = 3 times the investment, 3 times the amount of time to get traction, in order to gain 1/2 the results.

Chip Dawson
MD - IBML
Auckland, New Zealand

John Quelch
How to Penetrate the US Market
Accounting for almost 30% of world GDP, the United States is the world’s largest and most demanding market for almost everything from oil to microprocessors to premium coffee.
Let us look at the statistics first. We have many corporations that are registered in USA outsourcing the productions in India, Far East and the cheap labour countries. I have Nike in my sight. As an example. The brand sells very well with the sports enthusiasts who need shoes and do not know where these come fro. For that matter even the Coke and Pepsi are the other exemplas. I will grab the can and forget where it came from.
Now what we have is the brand of USA but the IMB or American gods having many components like the IC from Japan, plastic cover from India, circuits from Taiwan, lead from Zambia, stickers from Australia, and the sticky sticker from Brazil.
Now where are the goods or the GDP of USA you talk of? I am amazed these days to see the Suez used by the shipping companies giving the money to Egypt and the shots call, “If we did not use the Suez, the canal, would be a trench”. Is that the way we look at the economy? I doubt.
There is no need to penetrate the USA market, just have few offices in Sates and do all the business from the outside, label these made in USA and cash in. Yet one thing I want to know now. Who wants to come to USA now with the oil at 120 going to 200 and the lorry drivers complain of the price and Bush Iraq war that is all over the TV and the news. A failed economy for currently.
I thank you
Firozali A. Mulla MBA PhD
P.O.Box 6044
Dar-Es-Salaam
Tanzania
East Africa

Interesting article,

Especially since you mention IKEA as a case in point. However, many companies face an uphill struggle as they enter the U.S. market only to find extremely well-entrenched and competitive organizations already in the market.

To give comfort for those about to enter the challenge it could be noted that the strategy of Casella Wines of Australia was indeed very succesful for becoming one of the fastest growing import-labels in the U.S. wine market over a short period. I think this could be contributed to the fact that Casella used a Blue Ocean type of strategy with a different value proposition aimed at non-consumers, to start with.

The rest is becoming business history as we speak. Blue Ocean Strategy is a most powerful thinking and I use it extensively in our practice as strategy advisors.

Bjorn H. Lindback
Senior Partner & Adviser

XLNS Consulting Group, Sweden.

Ikea : don't forget that the core consumer proposition of Ikea is to bring stylish design furniture at an affordable price. They are smart about location and supply chain but what's differentiate them might be their unique and consistent capacity to deliver a sense of aesthetics to the mass market. The essence of the brand is all about that.

It is no longer adequate for European and other foreign manufacturers or service providers to view the U.S. as an export market. The successes to which the article has referred will rapidly lose values as the dollar continues to depreciate. Corporations should integrate vertically in the countries they consider important and worthwhile. They should establish autonomous investment centers in each market with long term visions. The example given of the Royal Bank of Scotland is not appropriate because there are plenty of domestically owned Regional Banks in the United States that have done well without help from across the Atlantic. Business Management principles are secular in their scope: it is not as though the United States is any peculiar species of business territory.

It right to do business in US but it is not easy for a new company to do that because of the competition from the US companies and other major indian company.small companies cant establish thier offices easily in US because of thier financial condition doesnot aloow them to do so.For example a small software company from india do get business from US but indirectly either through telemarketing or through emial and sometimes through thier website.Also small companies can't match the quality standards of the US market