Y O U R PA R T N E R F O R S U C C E S S I N T H E A M E R I C A S
WHITE PAPER
NAVIGATING THE CHALLENGES OF THE AMERICAN MARKET
The Americas Span
a Vast Geographic
Territory
Lance A. Scott
Founder & CEO
The United States and Europe are actually quite similar in
land mass, however, the combined land mass of North and
South America is more than 4x the size of Europe. Population
densities of the two regions vary dramatically, with vast
areas of the Americas that are sparsely populated but yet
economically vital.
These enormous geographic differences pose significant
challenges for international companies seeking to do business
in the Americas, and strongly influence site selection, sales
channels, travel expenses, cultural considerations, and
marketing approach. It is essential to understand these
challenges, and to carefully assess your organization’s strategy
for the Americas before establishing a U.S. office.
Choosing the Right Headquarter Location
Companies tend to place high priority on the cost of office
and manufacturing space when selecting a location to
establish their manufacturing operations in the Americas.
While facility expenses are certainly a factor to consider,
it is important not to overlook equally important factors
such as the availability educated workers, overall quality of
life within an area, access to capital, state and local
incentives, and the location’s proximity to targeted sales and
distribution accounts.
Figure 1: Population Density
Source: Organization for Economic Co-operation and Development
(OECD) – stats.oecd.org
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While there is some notable industry concentration of
key accounts within the emerging U.S. megacities and
“megaregions”, e.g., Semiconductor manufacturing
(Northern California), Automotive (Great Lakes),
Biomedical/Pharmaceutical (Northeast), there are almost
certainly key customers, influencers, and supply chain
partners in nearly every region of North America.
Failure to fully assess the broader socioeconomic
considerations for choosing a North American
headquarter location may lead to unnecessary financial and
resource investments that can impede growth and generate
misaligned expectations.
Figure 2: Regional City Population
Source: Organization for Economic Co-operation and Development
region, nor can an American sales manager visit the same
number of key accounts within a comparable timeframe as a
European or Asian counterpart who resides in a country with
much higher key account density. For example, whereas a
European-based sales manager may be able to access 50 key
accounts within a short driving distance, his/her American
counterpart may need to fly for days, or even weeks, to travel
to the same number of key accounts.
To address this geographic challenge, many industries will
utilize independent manufacturers’ sales representatives and
a sophisticated network of dealers and distributors to better
serve their customer base. When embraced as an extension
of a company’s customer outreach, these sales channels
can be a cost-effective and powerful resource to accelerate
growth in the Americas.
The Electronics Representative Association (ERA),
Electronics Component Industry Association (ECIA),
Manufacturers Association of North America (MANA), and
other organizations have established well-defined
geographic territories, educational resources, standardized
agreements, and related best practices to enable a seamless
integration for companies that recognize the shared benefits
of such relationships.
Figure 3:
Typical North American Territories for Electronics Industry
Manufacturers’ Representatives
(OECD) – stats.oecd.org
Sales Channel Approach
Understanding the impact of the vast American geography
is essential to selecting the most effective sales channel
approach. Even if a company is fortunate to locate
within a megaregion with a high concentration of target
customers, it is essential to choose the right sales channels
to address prospective customers throughout the entire
Americas region.
It is unlikely that an international advanced manufacturer that
is entering the American market will have the resources to
locate remote offices and/or sales managers in every major
Source: Electronics Representative Association (ERA)
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Without sound knowledge of a target industry’s geographic
distribution and key account density, companies may
expose themselves to much higher travel expenses,
inadequate sales channels, and employee frustration due to
unrealistic expectations.
Reliance on Distribution and Digital Communication
Many global organizations assume that they can transfer
their regional sales channel approach to the North
American market, but that can be a costly mistake. With an
expansive geographic area to cover and with ease-of-doing
business becoming increasingly essential, international
companies cannot ignore the role and importance of digital
communications within their sales channel approach. With
Forrester Research forecasting that 1 million U.S. B2B
salespeople will lose their jobs to self-service eCommerce by
the year 2020,4 companies have to adapt their sales channel
approach to accommodate the real-time, global buying
landscape of the Americas.
American buyers and engineers demand electronic
communication and product selection tools that are easy to
use, available 24/7/365, and perpetually up-to-date. Standard
products must be available for immediate delivery, and a
network of respected distribution partners is essential to
success in many industries. The sales channel landscape must
reflect the buyer archetypes of each company’s particular
products and industry.
Figure 4: B2B Buyer and Seller Archetypes
The U.S. market has fostered the development of a
sophisticated electronics distribution industry that plays an
essential supply chain role in this rapidly growing $350 Billion
industry. Electronic and electro-mechanical component
distribution has a profound influence on customer design and
procurement behavior in an increasingly global marketplace.
Leading electro-mechanical component manufacturers must
recognize and react to this rapidly evolving sector of the
market, and adjust their sales channels, marketing tools, and
support networks accordingly.
Collaboration with distribution may allow a company to
accelerate sales by gaining mind-share with salespeople, offloading time-consuming and costly low volume sales from the
direct sales force, and establishing an immediate presence in
a new market or region. The role of the distribution channel is
also clearly evolving from the traditional role of “high service”
catalog supplier, to that of a more comprehensive partner
for new product introduction (NPI), engineering design
specification, and prototype through production fulfillment.
Engineers at both large and small original equipment
manufacturers (OEMs) are rapidly becoming more selfsufficient as technical resources and e-commerce capabilities
are greatly enhanced.
These trends present unique opportunities in the marketplace
for manufacturers that offer comprehensive online resources,
broad product and data availability, and the ability for
customers to transact business in an intuitive, reliable, and
efficient way. Customers expect online solutions that enable
easy access to product identification (i.e. configuration, part
number selection, etc.), product resources (i.e., data sheets,
product images, 2D drawings, 3D CAD files, technical data,
etc.), and product availability (i.e., inventory search, channel
partners, price, etc.).
Figure 5: Top Electronics Distributors 2020
Source: Forrester Research, Inc. - Death of A (B2B) Salesman
Source: SourceToday™
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Recognizing Cultural Differences
Overcoming the Challenge
Once international companies have performed their due
diligence and selected an American location, it is essential
to observe cultural variations throughout the Americas.
Just within Canada, the U.S. and Mexico, there are notable
differences in communication, etiquette and organizational
hierarchy, and these differences can present a challenge when
creating and managing effective multinational teams.
Whereas a European parent company may have hundreds
of employees with well-defined and relatively narrow scope
of responsibility, a typical American operation will have far
fewer employees – many with cross-functional responsibilities
and decision-making authority. Recognizing how cultures
differ from those abroad can help global organizations avoid
misunderstandings with colleagues and clients that have
distinct attitudes and expectations of organizational hierarchy
in a cross-functional matrix organization.
Unfortunately, there is no one-size-fits-all solution for
advanced technology manufacturers. Each company has to
carefully tailor its strategy based on company size, industry,
product portfolio, technical complexity, etc. However, there
are some actionable steps companies can take to improve
their outcomes:
• Make the effort to define key markets and understand them
thoroughly; know the key participants within the industry; and
pinpoint industry centers geographically.
• Embrace the cultural differences! Engage salespeople and/or
independent representatives that understand the local culture,
language, customs and overall approach to doing business in
that region.
• Don’t just look for the least expensive place to do business,
but consider all facets including: access to educated and welltrained employee talent, access to customers within driving
(or rail) distance, continuing education opportunities, state
and local support for training, and corporate tax benefits.
• Budget for investments in marketing tools that are easy to use,
while also providing education to customers, facilitating strong
customer service internally and in the field, and supporting
applications knowledge in engineering.
• Be diligent in developing highly-effective distribution channels,
which when appropriate, may require partnerships and/or
strategic alliances.
⁴ Forrester, Death of A (B2B) Salesman, April 13, 2015
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