How Can You Compete?
10 Questions for inbound U.S. investors
Question 7 - How can you compete?
Deciding to invest anywhere is principally about what the target market can offer the investor. If there were no rewards to reap, there may likely be no point in making the commitment. To prosper, however, an inbound investor should turn the lens around and ask – like any business – what it has to offer to the U.S. market.
The first place to look for an answer is in differentiation.
- What can you provide to the U.S. market that no other company is currently offering?
- Who else is already there, or soon to be there, with an offering that competes with yours?
- Is there room for everyone?
- If not, are you confident you can crowd out the competitors instead of the other way around?
Often, an investor’s foreign status creates different value that U.S. competitors don’t match – thanks to intellectual property, advanced manufacturing processes, advantages in materials sourcing, or the power of culture. In other cases, a foreign investor will have to slug it out with other participants in the U.S. market on more or less equal footing.
Beyond market share, there are operational questions. Even if production, marketing, and sales are a well-oiled machine in the home country, different conditions for the U.S. operation might force some complex decisions.
- What will be the role and design of Enterprise Resource Planning (ERP) systems in the U.S. entity?
- Will you use an e-commerce model, outside sales, or boots on the ground?
Because of wider competition and differences in media and culture – particularly a tradition of informed consumerism that is now more than a generation deep – the U.S. market may be more sophisticated in a given sector than the one an investor is accustomed to serving back home. Creating an offering with value takes work. But securing a place for it in the United States may take intricate groundwork.
Questions behind the questions
- What have you done to understand the U.S. customers you’ll be courting? How might you meet their needs and habits knowing that they may differ from those of the customers you serve at home?
- As an overseas investor, how can you tap into growing regional or sector trends more efficiently than your U.S.-based counterparts?
Do it now
Imagine your company is a U.S. enterprise and that your planned investment won’t cross any borders.
- Sketch a version of your business plan based on this imaginary change. How do you rate your chances in the U.S. market?
- Identify the inflection points where this imaginary plan deviates the most from the real one you’re pursuing as a non-U.S. investor. Are these the specific differentiators that will help determine your market value?
No matter what industry or sector you’re in, moving to the United States means asking tough questions about market competitiveness.
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|Question 6: Navigating regulations|||||Question 8: Talent|