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Three reasons why 2011 could be a great year for US market entry

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Historically, the US tends to set up for a long period of growth after a major downturn. While the rebound from what Americans call the Great Recession has been slow, there are indicators suggesting that the US economy could be set for a multi-year bull run. The time is now to put US expansion plans on the front burner.

1. Favorable economic conditions

Improved relative economic performance and movement on deficit reduction efforts are likely to mean a stronger US dollar over the next few years. US companies are sitting on over $2 trillion in liquid assets. As a percentage of assets, this is more than at any time since 1959. The corporate sector will need to put these assets to work.

Real estate, unemployment and increased consumer saving rates will continue to be a drag on economic growth, making 2011 a relatively slow growth year. However, the deflating of the real estate bubble is probably over at this stage and unemployment is trending down. The US consumer is already showing signs of starting to spend again. 2011 is likely to be the ideal time to get positioned for a multi-year growth cycle.

2. Major disruptive changes

Some of the big disruptive changes that kicked off during the last decade or so are now maturing. In 2010, more will be spent on web advertising than print. Salesforce.com is on track to exceed $1.3B in revenues this year. Online sales are forecasted to reach $250 billion. Many of these changes have created opportunity for international firms.

In technology, cloud computing, mobile, consumer internet and digital media continue to build momentum. Big companies continue to struggle to adjust so there are land grab opportunities in many areas. There is talk of a bubble particularly in consumer internet and digital media but adoption of these technologies is rapid and reaching critical mass.

Web retailing continues to take market share with Amazon leading the way. Web retailers are typically easier to get listed and work with compared with traditional retailers. Being a featured product by a brand name web retailer gives international companies immediate credibility with US consumers. Setting up your own US ecommerce site is a low-cost and easy endeavour that will create a high-margin channel over the longer term.

Global brand building is now inexpensive. The prominence of social media means that many firms are building global brands by default. Marketing efforts in the US can be supported using the existing marketing team. The opportunity to engage with your ideal US consumer before you even set foot in the US market is invaluable.

3. The positive innovation loop

The US market in 2011 is in the midst of a major innovation cycle as the recession forced businesses to change. Being part of this cycle can drive innovation in the home market business operations. Competing in the US will give you an edge in other markets.

The usual caveats do apply. The US market is competitive and will probably cost twice as much and take twice as long as the business plan says. Economic conditions change and there are no guarantees. However, the current environment looks very positive for companies with great products and services plus a story that the consumers or businesses can connect with.

Phil Rogers is the founder and principal of Endeavour Advisory, a US-based firm focused on assisting international companies with US market entry.

Image by sashafatcat [Paul Joseph]

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