doing business in the usa - lessons learned from helping 100's of dk firms with entering and...

© 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.

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)


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

Massachusetts

3rd largest country in the world. Two and a

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

horizontally across industries but

not vertically as the DK market is

not large enough

Conglomerates can be found

spanning horizontally as vertically

due to the sheer size of some of

the niches

Consumers have relatively few

choices

Consumers are constantly

bombarded with new choices

Business is done from 9-5. “Call

back tomorrow”

Business is 24/7. Voicemails and

Blackberries dominate.

Vacation is 5 weeks Vacation is 2 weeks

Production can usually cope with

demand

One order from Walmart equals

several years of production –

choose your customers wisely

Product development and launch

takes years or months

Products are developed and

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

quality product (durability

mentality)

There is a desire for the optimal

price/quality relationship (buy to

throw out mentality).

Access to decision makers is

relatively easy

The USA is a Gatekeeper society

CEO is paid the most Sales team is able to make more

than the CEO

Stock options and results based

salary is for the minority

Stock options and results based

salary is for the majority

Employees value job harmony,

challenges over compensation

Compensation is the main driver

for your staff

Employees are loyal Employees will quit for an extra

100 dollars per month

Hiring and firing are both long

processes

Hiring and firing are utilized for

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

and parameters for your team and

partners, then let them run with it

Micromanagement is required both

for the team as your partners

When hiring: Applicants are

relatively modest and down to earth

– you can trust their word

When hiring: Applicants often

times stretch the truth – you better

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

business with small firms

Large firms want large/proven

business partners

Be truthful Perception is reality

Easy to adopt new practices of

doing business

Slow to adopt new practices

(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

hard

Be aggressive in your sales and

follow up

Networks are not particularly

important

Networks will get you credibility

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,

welcome then

So you sold in Germany…SO

WHAT! What have you sold here?

Being present in Germany is good

enough

Being present in the US is a

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 [email protected] or 404 588 1588

mailto:[email protected]

doing business in the usa - lessons learned from helping 100's of dk firms with entering and...

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