Crossing the chasm that is the Atlantic
THE ACADEMY OF BUSINESS STRATEGY
BUSINESS INTERNATIONALIZATION BLOG
Crossing the chasm that is the Atlantic: using the ‘special relationship’ as a springboard into major new economic blocs
AUTHOR
Luis da Silva (CBS) MA BSc BA
How often we hear politicians, on both sides of that pond that is the vast Atlantic Ocean, talk of the ‘special relationship’ that links the English-speaking countries on either side.
Put in perspective, clearly the politicians have given the term an emphasis which is not exclusive to a relationship between the United States of America and the United Kingdom. One has only to see how strong the links with, for example, Ireland are, to note that the domain of a close alliance with partners of the US does not reside only with the residents of the United Kingdom. However, in looking at the strong bonds that exist with the UK, Ireland, and even other nations on the periphery of Europe such as Israel, two aspects come to the fore in business terms: English as a primary language of business (even in Israel many top business people are educated in the US); and the ethos of managing and running businesses, which tends to favour an entrepreneurial spirit. It is this combination of language and style that proves to be key in assisting businesses in crossing the pond. Crossing the watery divide is often to businesses undergoing globalisation, what crossing the chasm is to technology businesses looking to move into a mainstream market.
There is no doubt that businesses in North America run differently to businesses in Europe. It is not only the English-speaking companies but also the French-speaking (Canada vs. France) and Spanish –speaking (Mexico vs. Spain) which operate with nuances on the different continents. While the scope of this two-part article will be limited to the challenges of moving in either direction between English-speaking countries, it is worth citing an example between two other countries using the same language. In simplistic terms, Spain is, largely by virtue of its inclusion within the European Union, looking to maximise trade with its largest trading bloc, the EU. Likewise, Mexico looks north of its border to maximise its largest trading relationship, with the USA. Language in this sense is secondary to proximity and economic context. However, it is worth noting that, once this initial priority has been addressed, the natural hunting ground of both Mexico and Spain lies in the fertile plains of Latin America. It is here that the importance of common language and a shared culture play their salient role.
Returning to the leap between the USA and the UK, or the reverse, English as a common language is in itself, not a sufficient differentiator, but without it, a company is likely to be doomed to limited success or even total failure. Without wishing to belabour the point, the ability of the company that seeks to make the leap, to conduct business fluently in English, implies that it is more likely to understand a business process that extends from preparing a marketing document or proposal, via the provision of a service or manufacture of a product, to preparing instructions for product use and providing after-sales service, and including the effective management of a local team. Without any question, assigning or recruiting a person who has the ability to speak and conduct business effectively in English is something which cannot, under any circumstances, be compromised. While this may not be such a crucial point for countries where languages of lesser global reach are spoken, having a country manager or director with anything less than perfect English, is too large a business risk, for a move into the US or the UK.
Clearly language is only the starting point for commonality. What these two countries which share the same language also have in common, is that their business models are much more market-focussed and open than many of their respective neighbours. Continental European markets are still, as are to some extent other North American markets outside the US, prone to a degree of protectionism. While it would be naive to assume that subsidies and some degree of favouring of local markets and products does not exist in the US or Britain, both Anglo-Saxon countries tend to operate based on fairly flexible labour policies and laws, a meritocratic system in the main, and the principles of survival of resilient business models. The early stages of a business and the creation of employment tends to be driven by entrepreneurial spirit and largely unsupported by government aid of any type. For this reason, poor businesses tend to die quickly, unable to conquer the necessary market share necessary to make their survival possible in competitive markets. Conversely , the markets are so large (relative to many of their neighbours) that a successfully-run business is likely to be able to survive and eventually thrive, due to a significant internal market.
Because to penetrate either market (UK or USA) is an expensive exercise (marketing and high senior management costs in the US, and the (historically) high value of the Pound as well as the operating costs in London, where many businesses choose to locate themselves, among other aspects), most businesses only get one chance to attempt this leap. To fail is not only an expensive exercise but tends to set the scene for what will be possible, in terms of that region, for the business. To avoid this danger, there are some critical considerations for any business aiming to take prior to making this move. In the next part of this article we will look at some of those…
ABOUT THE AUTHOR
Luis da Silva (CBS) MA BSc BA is an approved Certified Business Specialist (CBS) with the Academy of Business Strategy and his specialist subject is business internationalization. He has achieved an MA, and BA from UNISA and a BSc from the University of the Witwatersrand. He has been employed as a CEO and board member of a listed company with a turnover of €250 million and value of €1 billion and has experience within the Manufacturing, Electronics, Banking, Agribusiness, Travel/Airlines and real estate industries. His clients or employers have included Fractional Villas Inc, Invest CV Limited, BGR Ltd, API Undercliffe Ltd, DMS Lda, Emeritis, Quillion Ltd, Datanomic Ltd, E-business Partners, PLAUT and Andersen Consulting. He has geographical working experience in the USA, UK and Brazil. His language skills include English, Spanish and Portuguese. His service skills incorporate business management, business expansion or turnaround and people management.
To contact Luis da Silva, please contact the Academy of Business Strategy by forwarding an email, or visit Luis’s CBS Blog.
