Our Approach

If you are managing a young and fast growing technology company intending to enter the North American market place, you should have some answers ready for your natural concerns associated with this market entry, such as:

Cultural Differences in Business

Cultural differences between Europe and North America are often (if not always) dramatically underestimated, especially in business. What becomes obvious immediately when traveling to South East Asia remains often unnoticed until an order is lost when Europeans travel to North America to make a sale.  (As our business friends who are trying to sell North American products in Europe keep telling us, this holds true vice versa as well).

On the other hand, if there is a significant advantage in a certain piece of equipment, European technology is generally well accepted. (See also existing reservations , however).

To do it right, we want to keep our heritage obvious, but we don’t want to miss the point. Communication is key, and – compared to selling European products in Europe or American products in America – more thought and extra effort is needed.

This will affect all:

  • marketing activities
  • market communications
  • sales strategy

Sales brochures will have to look different, selling points will need revised, pricing structures will need adapted. And all these points (and much more) will have an effect on both sides of the Atlantic Ocean, if it’s done right.

Natecs is more than happy to support you in this field. 

Existing reservations against foreign suppliers

Yes, “Buy American” fanatics do exist. But they are a minority. To convince them otherwise should not be the main focus of a company just entering the North American market.

However, almost every business person has made some bad experiences with foreign suppliers, or at least knows someone who has. Those are real concerns rather than just patriotic emotions. Too many foreign companies have dramatically underestimated the cash requirements for their North American market entry, overestimated the achievable market share or underestimated the time needed to achieve a positive cash flow from their North American activities, just to disappear from the continent soon after their entry while leaving unsupported equipment behind.

Therefore, whatever you do in North America will be closely watched by your (potential) customer base in order to find out if you are really committed to this market or just testing the waters. Therefore, it will take you longer to build your excellent reputation. You have to know it, plan for it and deal with it.

The solution is maximizing face time with customers and providing excellent customer support for a sustained period of time. The good news is, once your through this introductory phase, it will pay off, too.

The cash investment required for your market entry

Your Investment and ROI

Most foreign companies who have entered the North American market have failed to reach their set goals. Most business plans are overly optimistic to begin with, almost everything takes longer than expected, nervous investors enforce one or even several strategy changes during the course of the project, leaving confused customers behind and making things drag out even longer (see also “existing reservations”).

The truth is: With a good product (line) and the right approach and attitude (on both sides of the Atlantic), your investment into the North American market will pay off within three to five years, depending on lots of factors.

All attempts we’ve seen to either make this process work faster than possible or make this process work with a reduced investment just to test the waters first, have resulted in making it drag out even further or make it fail altogether.

The solution is to enter the market early in the game. Do not wait until you need the quick result. Plan for the abovementioned ROI and find an approach to the market that minimizes your capital needs on the way.

Required project management resources

Project Management

Entering the North American market will introduce a lot of new chances, new business, new sights, but also new tasks and requirements into your company. Marketing people will have to understand the North American way of business, and developers will have to deal with different kinds of technical requirements not known from any other market.

Not many of these new requirements will be easy to understand for everyone, but – if complied with in a timely manner – most of them will contribute to the excellent customer support reputation to be achieved in North America.

…and probably all of them will hit somebody’s already overloaded desk.

Ensuring an appropriate priority for these tasks will be the more difficult the farther away you are from the one who has to do the work.

Again: Communication will be the key, and ensuring proper communication will be among the most important management tasks in this matter. Proper communication will facilitate everyone understanding each other’s needs and allow to make such a project a success.

The effect on your company’s market value

Increasing the Value of Your Company

Weather you (or the owner of the company you manage) plan(s) to increase the working capital or to sell out some equity further down the road or not, increasing the market value of your company is always a goal worthwhile to devote some resources to.

If you are manufacturing any kind of capital investment goods, a successful market entry in North America most likely will significantly increase the value of your company.

The key word here is “successful”: It has to be done right.

Build up an excellent customer support reputation and a good communication culture over the Atlantic Ocean that makes your North American customers feel taken serious and appreciated, and you will earn a set of returning customers contributing significantly to your revenue, EBIT and cash flow.

Let us help you achieve this goal faster. 

Legal risks associated with your presence in the North American market

Risk Management

Any business activity in North America exposes you and your company to a variety of specific legal risks, resulting for example from product liability, anti-discrimination or tax laws.

Partnering with Natecs, you are offered a distribution contract under European law, the goods can be imported by Natecs International, LLC or an affiliated company, and personnel is hired on our payroll.

Although legal risks cannot be avoided entirely, we do believe that this structure offers the most beneficial solution for our business partners.

Not to forget:

The competitiveness of your products in this dramatically different market place

Competing in North America

Numerous studies have been accomplished about the purchasing behavior in North America. As different as the recommendations included in all these studies may be, there’s at least one result, almost all of these studies have in common:

The key selling factors involved in a typical purchasing decision are more or less identical, while the particular ranking of these factors tends to be dramatically different: Whereas the typical European purchasing decision is mostly focused onto quality and performance, American customers look mostly at price, reliability, maintenance requirements, cost of operation, and ease of use.

If your key selling point outside of North America is price, and price only, you probably won’t have a point here. After adding import cost and duties, and after looking at the elevated cost of sales in North America (see cost of sales ), chances are you won’t be the price leader on this continent.

Your products need to be better instead, and you’ll better be able to explain to your customers how they’ll get their money back quickly. Providing an impressive Return on Investment to your customers is the key to success for any type of technology leading capital investment goods.

Finding the best sales approach for you

Finding the Right Sales Structure

If there is such thing as an easy sale made in North America, it is a sale through price. As explained almost everywhere on this web site, chances are, that won’t be your product.

A product that excels through technology leadership calls for a sales structure that is able to explain your products’ advantages and associated cost savings to customers.

If you have a technology leading product, you’ll need a technology educated sales force which has also the required motivation to go the extra mile in order to excel on the customer support side of the job.

Anything else won’t be successful.

Required product adaptations

Product Adaptations

Besides the obvious requirements such as making your product work while connected to a 60Hz power supply, there are much more things to be considered to prepare a successful market entry in North America.

You will have to comply with legal documentation and safety requirements, and a correct translation of what’s required in Europe may or may not be sufficient.

You might want to rethink temperature and humidity range of your product to meet the needs of both Alaska and Texas.

To improve acceptance of your product, it is important to consider what kind of operator will usually work with the equipment. And that may be different from any other region, resulting in a need to adapt i.e. the user interface.

You might want to complement your existing CE certification with a UL listing and use locally available and locally supported sources for all commodity spare parts and wear and tear items (i.e. nobody wants to backorder a 230V light bulb from Europe and wait a couple of days for it to get through customs when production is affected). Plus, it might make sense to provide a way to comply with often found corporate policies regarding preferred components.

As you may already notice while reading these few examples, this is an area which requires a closer look in conjunction with the particular product range, and we are more than happy to contribute our experience.

And, of course, you’ll want to:

  • Ensure providing professional services to customers from day one
  • Show a professional image to all of your business partners
  • Maintain your flexibility to change the approach further down the road without losing your customer base.

To make all this happen, Natecs International, LLC will found an affiliated entity, owned by Natecs International, exclusively to distribute your products and provide the associated services to customers.

This newly founded entity may or may not operate under a name that includes your company name. Both ways have their pros and cons, which leaves this part to a face to face discussion. In any case, the required personnel will be on this company’s payroll instead of yours (see legal risks mentioned above), but will yet communicate with you as if they would be your employees thus making sure your competitive advantages will be properly explained to customers.

And even better though: You won’t have to worry about too many administrative issues, which should sound like a big plus, especially while getting sales should be the most important thing to spend valuable time on.

To learn more, please contact us . We will be more than happy to discuss further details of our unique approach.