Having done business in both the United States and Europe there are many similarities between the two markets: both have relatively large geographic areas, high population concentrations and thousands of companies to market to. But that is where the similarity seems to end.
In Europe, I found marketing and expanding business much more difficult due to language, cultural differences and regulations. Markets can vary greatly from country to country. Companies looking to expand their boundaries need to do their homework.
Looking to increase sales, companies often look for business opportunities in other vertical market segments, nearby countries or even other continents. The farther a company ventures outside of their geographical boundary, the more due diligence needs to be done and the more important role market research and opportunity analysis plays.
I had the opportunity to speak with Hans Kaashoek of Strategy Partners to get his views on market expansion and development in Europe.
Skip: Hans, could you share with me your viewpoint on the European marketplace?
Hans: For many international software companies, the European market looks like a great business opportunity. It has all the attributes companies look for: a compact business structure, dense population and a good technical and public infrastructure. Despite the impact of the recent economic crisis, indications are that business is still at acceptable levels and the worst seems to be over.
From a very high level these observations are true. They are also true for individual European countries. However, designing and executing a generic pan-european reseller or product introduction program can fail due to the significant differences between the individual market segments, their dynamics and more specifically the Enterprise Content or Output Management market characteristics.
European countries have a very closed eco-system of small local vendors and system integrators. Together they successfully serve a large community of end users in specific vertical market segments. They offer vertical market solutions focused on business process and are in constant search for additional solutions and services to serve (and protect) their installed base. .
Skip: How can this impact international software companies and how can they capitalize on it?
Hans: A strategy of some large software providers is to focus on large, international end-user accounts. They typically dedicate a new business development or sales person to several named accounts to try to sell a software solution based on the successful implementation of an account in their home country.
These companies frequently rely on their companies consulting and systems integration capabilities or that of a large international service firm. However these firms are often limited in their local decision making when looking at expanding capabilities, new solutions or additional services.
International companies can benefit from this eco-system of small local vendors by being able to select the right solution provider for a given vertical market providing additional functionality that gives their solutions new and unique capabilities. It is a successful strategy for entering new markets
Skip: How does Strategy Partners fit into all of this?
Hans: Based on our experience as an international IT market research and business analysis firm and the need for more detailed European market information, Strategy Partners has recognized these market differences and are focusing their market research and business development support services specifically on the European market.
Strategy Partners market research is much more than market size and vendor position information. It also contains information about local buying characteristics, competitive offers, distribution channels, support capabilities and the execution capabilities of solution and service providers.
Doing this kind of research brings Strategy Partners in contact with the management level people in the different firms across the document capture, process, content and output management markets. It also makes it easy to match existing product portfolios of these vendors with the additional capabilities of new product or service offerings. This increases the value of the offering for the local vendor and creates additional value.
Business engagements resulting from this market insight are often of a pragmatic and result oriented nature. The local vendor is happy with the additional functionality that increases his offering to his current customers and allows him to look at new local market segments, without having to develop and maintain the functionality himself.
The international vendor is happy because his solution is offered and supported by a credible party that already has a large installed base focusing on the added value of the product within specific vertical market solutions.
Skip: Does Strategy Partners support end user companies?
Hans: Yes, supporting both the development of end user ECM or Output management strategy plans and the execution of these plans via program management services, solution selection and implementation, gives us a twofold insight of market possibilities.
First, our detailed knowledge of local vendors, partner eco-system and product portfolio’s. The other being the direct insight and involvement in the needs and plans of user organizations. This combination can help international companies that want to develop businesses in Europe with a pragmatic and result oriented level of business development support.
The validation of business objectives, understanding the current product and service offerings along with the Go-to-Market requirements is essential. Companies can avoid investing in the wrong countries, reselling structures and market segments by having an impartial and knowledgeable company recommending the best market segments and partner organizations.
Skip: Tell me about the market research you do in Europe.
Hans: Our research covers three major areas:
1. We calculate the market size of the different ECM and OM market segments in business volume and implemented reference projects for each of the major European countries,
2. We investigate and analyze trends and market developments from a solution or services point of view as well as the development of end user requirements and local standards along with government enforced requirements.
3. Finally, we investigate the local market presence and execution capability and capacity of the different national and international vendors in each country or market segment.
Skip: Hans, thank you for your time. Do you have any closing thoughts?
Hans: The knowledge of the markets, the different vendors, their position in each market and their management teams as well as the operational involvement in end user projects make Strategy Partners a knowledgeable partner for Go-to-Market business support partner for companies who are looking for business or further business expansion in Europe.
Strategy Partners has operations in the UK and south of Germany. The office in the Netherlands supports the Benelux, West Germany, France and the Nordic countries.
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