Doing Business In The USA - Lessons learned from helping 100's of DK firms with entering and growing in the US market

Doing business in the USA
-
Experiences from the Trade Commission of Denmark in
Atlanta

By Jan Sauer
Trade Commissioner
Trade Commission of Denmark in Atlanta (TCD)

© Copyright 2005 Danish Trade Council. All rights reserved. All reproduction or distribution of any material in this presentation (including, but not limited to, text, graphics, etc.), is strictly prohibited.

Why would we know?

– Since 2005 the Atlanta office has executed over 600 engagements
for Danish firms in the USA

– The Atlanta office has become the largest office in the USA based on
our extreme bottom line focus and the ability we have to make a
difference to Danish companies

– The Atlanta office houses 24 Danish companies in our incubator,
helping them startup and grow

– The team at TCD Atlanta has over 40 years of combined international
business experience in Strategic Planning, Sales, Marketing and
Operations


The objective of this presentation

This presentation seeks to answer a few key questions with regards to
Danish companies doing business in the USA:

• Things to consider before entering the US market (or any international
market for that matter).

• What main differences between US and Denmark should Danish
companies be aware of?

• What impact do these differences have for doing business in the USA?

• What are the typical pitfalls and errors that Danish companies make?

• What best practices, tips and tricks exist?


When going international a few key questions should be answered…

– What is the motivation for entering this market
– How does it fit with the overall strategy
– What should it do for the company long term
– Is Sr. Management involved and backing it

– Is there a demand for my product and how big is the market
– What are the challenges and opportunities for my product
– What do I know about my potential customers
– What do I know about my competition
– What will be my unique advantage – what should be my focus
– Have I developed different scenarios with ROI to determine the most
appropriate plan
– How do I enter and how does it fit the longer term strategy
– How do I execute most efficiently
– Have I considered what it takes, i.e. financial, support and
communications from Denmark and Sr. Mgt., and other resources
– What results and timelines are realistic

And…have I consulted experienced people for support and feedback to
my plans


Should US be the next stop in one’s internationalization, one
immediately notes that the USA and Denmark differ on a number of
basic parameters
Denmark USA
Population: 5,5 mill 300 mill
Ethnicity: Danish, with few immigrants A melting pot formed by immigrants
Languages: Danish English and Spanish. Urban areas have
concentrations of chinese, polish, russian,
italian.
Total land area in sq. km: 42,394 9,161,923
Coastline in km: 7,314 19,924
Comparative area: slightly less than twice the size of 3rd largest country in the world. Two and a
Massachusetts half times the size of the European Union
Government type: Constitutional monarchy Constitution-based federal republic
Legal system: National civil law system Each state has its own unique legal system,
of which all but one (Louisiana's) is based
on English common law
GDP per capita: $34,600 $41,800
GDP growth rate: 3.40% 3.40%
Unemployement rate: 5.50% 5.10%
Largest urban areas: Copenhagen - 1,2 million New York - +15 mill
Aarhus - 500.000 Los Angeles - +12 mill
Odense - 200.000 Chicago - +8 mill
Miami -+5 mill
Atlanta - +4 mill
Currency: Danish Kroner US Dollar

Several urban areas are the size or bigger than Denmark
alone…..and each has its own unique characteristics.


Many of the observed differences have a direct relation to how a
Danish company should arrange its US operations

A number of the most influential things to consider:

Denmark USA
One single homogeneous market A multitude of markets
Conglomerates generally span Conglomerates can be found
horizontally across industries but spanning horizontally as vertically
not vertically as the DK market is due to the sheer size of some of
not large enough the niches
Consumers have relatively few Consumers are constantly
choices bombarded with new choices
Business is done from 9-5. “Call Business is 24/7. Voicemails and
back tomorrow” Blackberries dominate.
Vacation is 5 weeks Vacation is 2 weeks
Production can usually cope with One order from Walmart equals
demand several years of production –
choose your customers wisely
Product development and launch Products are developed and
takes years or months launched in months or weeks
Customer service is open from 8-6 Customer service is expected 24/7
Quality is the driver of success Sales is the driver of success


A number of the most influential should be mentioned:

Denmark USA
People are willing to pay extra for a There is a desire for the optimal
quality product (durability price/quality relationship (buy to
mentality) throw out mentality).
Access to decision makers is The USA is a Gatekeeper society
relatively easy
CEO is paid the most Sales team is able to make more
than the CEO
Stock options and results based Stock options and results based
salary is for the minority salary is for the majority
Employees value job harmony, Compensation is the main driver
challenges over compensation for your staff
Employees are loyal Employees will quit for an extra
100 dollars per month
Hiring and firing are both long Hiring and firing are utilized for
processes competitive advantage, i.e. it is a
extremely flexible parameter
Titles mean less than responsibility Titles and status symbols are
extremely important


Denmark USA
Everyone’s opinion counts The boss is always right
Work – life balance Work hard – play hard
Management by setting objectives Micromanagement is required both
and parameters for your team and for the team as your partners
partners, then let them run with it
When hiring: Applicants are When hiring: Applicants often
relatively modest and down to earth times stretch the truth – you better
– you can trust their word check the reliability
Less need for references Make sure you turn every stone!
Business is international Business is local (US only)
Big companies do not hesitate to do Large firms want large/proven
business with small firms business partners
Be truthful Perception is reality
Easy to adopt new practices of Slow to adopt new practices
doing business (checks are common, etc)



Denmark USA
The “noise” is growing The “noise” is unbearable…make
sure you are 110% focused on
what makes you different
Be courteous and don’t push to Be aggressive in your sales and
hard follow up
Networks are not particularly Networks will get you credibility
important and pass by the gatekeeper
This is our portfolio of offerings This is our sole focus
This is the package that we offer This is what the product will do for
your bottom line! (ROI fixation)
So you sold in Germany…well, So you sold in Germany…SO
welcome then WHAT! What have you sold here?
Being present in Germany is good Being present in the US is a
enough requirement

And once you are there many more will come to mind


While quite obvious that the US and Denmark differ, many Danish firms
assume that it is “business the usual way”

And encounter a number of pitfalls…typically:
• Lacking focus! Wanting to conquer the US as one market

• Lacking concentration around what one does best

• Lacking preparation and planning…going into the market blind

• Not committing to the market but handing it off to a 3rd party and
depending solely on said partner…thereby failing to secure intelligence
and chances for long term profitability…losing the partner can mean that
the company looses all that it has gained

• Engaging the wrong partner

• Not supporting the partner/US subsidiary – being too hands off


While quite obvious that the US and Denmark differ, many Danish firms
assume that it is “business the usual way”

• Signing exclusivity for a region without securing reciprocal commitment
to results

• Engaging the wrong people

• Lacking spend on marketing and sales, thinking that the product sells
itself

• Expecting profitability too soon, or committing to few resources

• Hiring the wrong advisors

• Not listening to the right advisors…”I built a firm in DK, how much
different can it be”

While errors are unavoidable a few basic recommendations can
be offered..


General recommendations

– Get it right from the start! Plan, prepare then execute extremely
focused! The US most likely has the most potential of all your
markets so treat it that way

– Engage the right advisors to begin with, particularly in the vital
matters such as corporate law, immigrations, and tax related…or
you will fail very easily

– Focus on listening and learning, developing trust with your clients
and relationships, and making contacts that can help you down the
line for the first 3-6 months…don’t expect a sale immediately

– Focus on a clearly defined market to begin with (geo or prod)

– Focus on your most proven / most successful product. Do what you
do best!

– Make sure you know your potential customers and their needs

– Focus on the bottom line benefit and ROI of your product when
selling…what is in it for them


General recommendations

– Focus on getting clients you can deliver to without burning yourself:
Don’t go after a Coke to begin with

– Focus most of your resources on going after your top list of
potential clients, but don’t overlook other opportunities

– Focus on closing the first sale and proving yourself in the USA…it
will be a lot easier after that

– Focus your HR resources: Don’t staff your US operation with 1 man
who is the President, the Sales team, the Accountant and the Admin
assistant…do use outside resources for leverage

– Focus on getting the A-team for your start-up operation: It takes
long hours, lots of enthusiasm, and a do or die attitude!

And last…Focus, Focus, Focus…Have focus in all that you do! Know
exactly where you want to go and how to go there, but listen on the
way!


We are here to help.

Contact us at atlhkt@um.dk or 404 588 1588


Doing Business In The USA - Lessons learned from helping 100's of DK firms with entering and growing in the US market

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Doing Business In The USA - Lessons learned from helping 100's of DK firms with entering and growing in the US market