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ManageMent www.us- tech.com Navigating the Challenges of the Americas Market:


The Comparatively High Cost of Doing Business


By Lance A. Scott, Founder and CEO, Alliance Technologies T


he vastness of the American market has a strong influence on the cost of doing business.


There are also additional factors re- lated to the uniquely capitalistic en- vironment that also impact the ex- pense of operating a U.S. office. Plan- ning appropriately for retention of employee talent, securing attractive office space, acquiring new cus- tomers, and developing distribution and sales channels will help organi- zations to avoid the shock of the com- paratively high cost of doing business in America.


American Labor Market Given Europe’s reputation as


having one of the most expensive la- bor markets in the world, interna- tional executives are often astounded at the requested salary levels for U.S. employees. According to the U.S. Consumer Expenditure Inter- view Survey, U.S. employees rank highest among any other country for both disposable and gross income. It is vital for European manage-


ment to recognize that U.S. employ- ees and employers typically endure much higher social costs, due to com- paratively limited government sup- port. Employees and employers alike are confronted with the rapidly in-


creasing expense of health insur- ance, retirement savings accounts (e.g. 401(k), SEP), disability insur- ance, unemployment


workers compensation insurance and the daunting task of saving for uni- versity education — often for multi- ple children. A common understand- ing of these economic differences is essential to avoiding international tension and misinterpretation. Not unlike Europe and Asia,


commercial properties in major pop- ulation centers in the Americas come with a substantial price tag. Howev- er, vast geographic distances be- tween major American cities and in- dustry-specific key customer concen- trations underscore the importance of U.S. office location. Higher lease rates and expen-


sive real estate are typically associat- ed with these “megaregions” as they also provide easier, more convenient access to customers, resources, capi- tal, and an educated, well-trained talent pool. While international companies


could save money in securing space in more remote areas, they have to consider the additional costs of locat- ing away from population centers and the corresponding concentra- tions of talent, capital, education, health care, and other resources.


Navigating the Challenge of the American Marketplace


Helping international advanced manufacturing companies to accelerate strategic growth in the American market through direct operational management and expert guidance.


Getting Started in the Americas


Restructuring Your American Operation


Managing Your American Operations


Advising Your Board of Directors


Accelerating Growth Through M&A


Wherever you are on your journey to expansion into the American market, we can help. Contact us to discuss how we can grow your business, together.


+1 203 226 8895 sales@allianceamericas.com allianceamericas.com


Travel Expenses Due to this broad geographic


dispersion of customers in the Amer- icas, the majority of European na- tions benefit from a much higher key account density with most customers accessible by auto or rail within a day of travel. Traveling within U.S. megaregions is often restricted by heavy auto congestion and a very limited passenger rail infrastructure. Travel between megaregions is al- most always planned as part of a multi-day itinerary. Although efforts are finally un-


derway to modernize the passenger rail infrastructure within and be- tween North American megaregions, this is heavily influenced by local po- litical and economic status and likely to take decades to evolve. Traveling between North American megare- gions is therefore even more cost-pro- hibitive, because most journeys re- quire air travel, hotel stays, rental cars, meals, and related expenses. While the frequency of customer


visits is typically less than that of their European or Asian counter- parts, companies can generally antic- ipate much higher expenses com-


pared with other geographic regions. The lure of the North American


insurance,


market attracts nearly all top global competitors from the Americas, Eu- rope and Asia, elevating the impor- tance of capturing and retaining cus- tomer attention in a crowded compet- itive space. An often-decentralized sales team requires consistent and effective training and sales tools. The drive toward digital communication demands nearly continuous accessi- bility for customer service, product information, and customer educa- tional resources. Coupled with the high costs of


travel, qualified personnel and in- tense pricing/margin pressure, there is an elevated demand for companies to invest in the development of high- ly effective marketing materials, whether focused on the customer ex- perience, lead generation or brand recognition. Companies must prepare for


comparatively higher investment in websites, digital communication tools, webinars, trade shows and ex- hibitions, conferences, sales training, product demonstrations, promotional items, and other constantly evolving marketing collateral.


Implementing Strategy Without a well-considered and


collaborative implementation strate- gy, the increased reliance on distribu- tion and sales channel partners can negatively influence margins. While these highly sophisticated channel partners can greatly accelerate mar- ket access for a global organization, companies must consider pricing structures carefully to protect contri- bution margin, entice direct OEM business for higher-volume needs and to remain competitive in an aggres- sive American marketplace. Careful research and planning


can help international advanced manufacturing companies to priori- tize investments and avoid costly mistakes entering the American market. Each company must careful- ly tailor its strategy, based on compa- ny size, industry, product portfolio, and technical complexity, to best ad- dress the challenges and opportuni- ties of the U.S. market. Alliance Technologies is able to provide ac- tionable steps to help companies


overcome these challenges. Contact: Alliance Technologies,


LLC, 26 Davis Hill Road, Weston, CT 06883 % 203-226-8895 E-mail: sales@allianceamericas.com Web: www.allianceamericas.com r


September, 2019


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