North American Companies in Europe: Expansion Profiles & Key Drivers
When the pandemic started, many businesses were trying to adapt to the new ‘normal’. Even though many stopped their activities, others have found a way to make the most out of the new business landscape. That is when many companies decided to expand to other markets, and the first logical step for many North American companies was Europe.
We did our homework at EuroDev to learn more about North American companies that are expanding to Europe and what their main key drivers are.
US Companies Expanding Internationally
Changing the way we look at business brought us to the point where a lot of corporations are starting to explore opportunities to diversify from competition overseas. Over the past year, the percentage of multinational companies considering exploring other markets except for domestic grew by 5%. Leading North American companies started to reinvest time and resources and build their presence internationally.
Since the UK, France, and Germany are part of the top four Western economies besides the USA, expanding to Europe is a big opportunity.
Where do North American companies set up a business in Europe?
When starting a business in Europe, many North American companies choose countries where people speak the same language. 75% of top-tier companies chose London, Dublin or Amsterdam as the first location for their expansion. According to research, 63% of US B2B software companies opened their first office in the UK. Paris and Berlin are selected by only 3% of companies.
The Key Drivers for European Expansion
According to our survey, 30% of US companies are motivated to come to Europe to reach their profit goal, and 32% have to offer unique products to the new market. Since the European market shares a huge percentage of global revenue, this is a reasonable choice to make.
When planning their expansion in Europe, North American companies are searching for knowledge, localization and international business talent, which is exactly what EuroDev can offer. Being focused exclusively on Europe makes us the best choice for an international business development organization.
Profile of North American Companies Expanding to Europe
A common misconception is that only big US companies are expanding their business internationally. Our research shows that 24% of companies have between 20 and 50 employees, and 26% of them have between 100 and 250, as well as over 250. When it comes to revenue share, 40% of businesses have between 5-50 million. This proves that SEMs are more likely to expand to Europe with a foreign partner than large corporations.
Most of our partners are in B2B, and 88% of them already have some experience in Europe. They have tried to use the same distribution channels as they are using in North America – direct sales to OEM, selling to large-end users, or sales, agents and brokers. Nowadays, they are still using these sales channels but have adjusted to the European market thanks to having their boots on the ground.
The fact that 20% of companies used trade shows as their main marketing channel prior to working with EuroDev speaks of the importance of visiting and being present when you are trying to expand to a different market. It is the same percentage of companies that were using email marketing. The statistics are the same when we are talking about marketing media channels these companies are using in their country.
At the moment, 34% of our clients have between 5-10% of their business revenue in Europe, while 23% of them have between 10 and 30%. In the next 5 years, 70% of them expect to be in the gap of 10 and 30%.
Starting a Business in Europe with EuroDev
Implementing expansion strategies successfully can be a lot of work, but it is worth it – and EuroDev is here to help. With our expertise and knowledge, your European expansion will be smooth and steady. We will be your boots on the ground regardless if you are searching for a Sales Outsourcing, HR Outsourcing partner, or Digital Marketing services.
Let's chat about the next steps for your expansion in Europe.
Source: EuroDev Survey
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