What is the first step for a European manufacturer to enter the U.S. market? A market analysis is an easy and effective way to get the data needed to support the decision to enter. This article talks briefly about what a basic market analysis includes, and how to engage a partner to receive one. Manufacturers with revenues in the range of $50M - $250M per year will benefit most from this article.
A market analysis includes information a Europe-based manufacturer needs to make the decision to invest time and resources to enter the U.S. market. Revenue growth is an important goal of new market entry, so the analysis should focus on who is in the market, where they are located and how much volume or revenue is transacted.
Customers, competitors and suppliers, the "who", are the core participants of a market. The market analysis should identify main players in the new entrant's field of business. Sources for this information include experienced consultants, industry organizations and trade fairs. Knowledge of key players in an industry helps a company to build relationships as it enters a new market.
Location, the "where" of business activity, is important so that sales force effectiveness can be planned. For example, covering the entire United States with sales representation may seem a good idea at first. The hope would be to generate revenue from all possible sources. When the logistic time and cost needed for a national campaign is calculated, a more focused, regional sales approach is often chosen. This means it is important to know where decision makers are located, so that sales efforts can be leveraged within the initial investment in sales representation.
Market size, or "how much", is the estimate of product volume or revenue being transacted in the market. Financial decisions for market entrants are strongly influenced on how much revenue can be generated, so a financial return to shareholders can be delivered. The market analysis should include a volume or revenue estimate. In a short analysis engagement, a basic idea of market volume can be developed. With longer analysis engagements, a more accurate and detailed volume or revenue estimate is possible.
In summary, a market analysis is a low risk and effective way for European manufacturers to plan entry into the U.S. market. Selecting an experienced professional in your industry leads to a high quality result for your decision making process. Wilmarco Technologies has helped a number of European manufacturers enter and grow their businesses in the U.S. market.