BREAKING INTO THE U.S. MARKET
The United States is the largest economy in the world. In 2021, the U.S. GDP was $23 trillion USD, representing roughly 18% of the global GDP. As a result, the United States is a highly sought-after, but notoriously challenging, market to enter. For example, many international companies underestimate the sheer geographic size of the market. This has numerous implications for businesses because it requires the development of specific audience segments for different regions of the US. A company's product or message will resonate differently in urban California vs rural Texas. In addition to geographic and cultural differences, companies need to properly understand the different federal, state, and local regulations that will impact their business. Because entering the U.S. market can be so complex, a local partnership can be the best way for international companies to successfully break into the market.
We discussed the complexities of entering the US Market with two experts: Damon Claus, CEO of CASTUS, a Pittsburgh-based consulting company specializing in International Expansion and Gal Inbar, Executive Director of 412x972, an organization dedicated to creating new business development opportunities between Israel and Pittsburgh. Read on for valuable insight on how businesses should evaluate the opportunity of entering the US Market and how-to improve their chances of doing so successfully.
QUESTIONS FOR DAMON
- What key questions should companies ask themselves when deciding whether or not to enter the US market?
The key question that needs to be answered is simple: Are you solving a problem for the U.S. consumer? By-in-large American consumers love to buy “stuff”, which means there is lots of opportunity for brands that are selling “stuff” consumers want. But businesses need a strategy if they want to build a sustainable business. A one-size-fits-all approach will not work. It is important to take the time to identify specific opportunities to ensure you are managing your resources appropriately. Companies looking to break into the U.S. market need to build momentum and listen to customer feedback.
- In your experience, what is a common mistake you’ve seen companies make when entering the US market?
A common mistake companies make when expanding into the U.S. market is the misallocation of resources. They either under-invest or over-invest people, money, time, and energy. It is important to develop a clear mission and strategy because the U.S. market is extremely competitive, and it is easy to get lost in the noise.
- Why is it helpful to have a U.S. partner when entering the U.S. market?
It is critical to have a U.S. based business partner because you need access to their experience. The ability to leverage someone else’s successes and failures is key.
QUESTIONS FOR GAL
- Tell us about 412x972. Why did you decide to found the company?
412 by 972 was established to build business bridges between Israel and Pittsburgh. The Jewish Federation of Greater Pittsburgh was seeking to develop an entity that would generate real value for businesses in both locales, and the idea was to help businesses of each location to find customers and partners in the other location. The innovation was that unlike most players who are trying to nurture bi-locational business development, we are for-profit, so we must generate tangible value to our clients. We are helping both the sell side (business development), and the buy side (innovation scouting).
- What are the biggest challenges international companies face when attempting to break into the US market?
There are many challenges for companies that try to break into the US market - branding, pricing, positioning, logistics, product and package design and more. On top of it, in all the cases we came across, there is a strong cultural difference that if not addressed properly and constantly, generates a lot of friction that can be quickly translated into business failure.
- How has CASTUS helped your clients overcome these challenges?
CASTUS feels to me as a great partner in strategizing and establishing sales operations in the US. I like the methodological approach the team developed, and as one of my clients went through the whole strategy & deployment process, I can provide first hand feedback regarding the great team and the hands on approach.
At CASTUS, we have experience helping brands enter the U.S. market. Our team of business development experts provides strategic direction to streamline your expansion process and optimize your resources. We would love to talk to you about International Expansion.