3 Examples of US Companies Expanding into European Markets

US companies continue to expand into European markets.

As you would imagine, though, there are challenges with expanding.

There are a number of things companies need to do as they expand overseas into European markets. Some of the biggest challenges and obstacles are legal-related. That’s where knowledgeable lawyers can provide a valuable service for these growing companies.

Some companies have successfully been able to do it and others are currently looking at expanding and that includes into Europe.

A recent survey of US businesses found that 36% are currently looking to expand into the European market.

Here are 3 examples of US companies expanding into European markets. Two are major US companies and one is a tech company out of Silicon Valley. All are taking steps to grab the European market.

1. Netflix

Netflix moved beyond US borders in September 2010 into Canada and into Latin American the following year. It turned its sights to Europe in 2012, launching in the UK and Ireland early that year and Denmark, Finland, Norway, Sweden and the Netherlands in the latter part of the year.

The Organisation for Economic Co-operation and Development (OECD) said the expansion into these countries represents an estimated 63 million broadband households; there are 94 million broadband homes in the US.

Around the world—outside of the US and Japan—Germany and France have the greatest number of broadband homes. And, competition is stiff in those countries, which already host their own similar offerings that are priced competitively to Netflix. The company is known to remain quiet about its inner workings—it does not report its international progress by market. But, it did publicly celebrate 1 million UK members in less than nine months after launch.

Netflix does have an eye on the biggest market in Asia—China—but expansion there is in the distance at this point. The company seems to be focused on conquering Europe before shifting gears to China. Performance in countries like Germany and France, both of which have established competitors, will be key in breaking into that country.

2. Macy’s

Macy’s is one of the highest performing US retail stores, but in recent years the company has begun to look outside the US to generate more sales. It has been able to do that through international shipping via the company’s retail website.

But, last year it announced it will open a four-level, 205,000 square-foot store overseas—in Abu Dhabi—in 2018. Long a holdout on international retail business, the $28 billion Macy’s clearly sees that overseas expansion is the way to go with domestic retail sales slowing.

This year, Macy’s has also looked at China and other potential overseas ventures. It has made no official announcements on a China strategy, but company executives have made trips there and have been studying the demand in that country.

3. New Relic

New Relic is a large data software company that was launched in Silicon Valley under a year ago, but has expanded into Dublin as its first international location.

According to the company, Dublin was a good choice for global expansion because the way business is done there is similar to that in the US. A young and educated workforce means the business culture in that country is actively seeking new technology.

New Relic also said that labor and real estate is less expensive in Dublin than in other European cities. The challenge New Relic, as a new startup software company, may face is that of labor costs in Ireland that are expected to rise.

Why This Is Important For You As a Lawyer

One of the most important aspects of global expansion for any company is the legal aspect: the laws and regulations on businesses in those countries.

A study found that for 83% of small and medium-sized US businesses, overseas expansion is the top priority. For those companies there will be many challenges with legal challenges ranking near the top of challenges to solve.

Companies need to make sure their legal departments or legal partners are qualified to practice in other countries. Lawyers must be properly qualified to practice in desired markets.

Companies have the option to hire local lawyers in the country where they want to expand. But companies are also likely to work with qualified lawyers they are familiar with.

If you can become qualified in multiple markets while proving yourself valuable to a company they will see the value in hiring you to help as they expand into multiple European markets.

Are you interested in expanding your legal qualifications? Learn more about the QLTS Assessments and begin growing today!

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