top of page

The American Business Climate: An Overview for Entrepreneurs and Investors - red/blue ocean?


(This article is written by Harshal Patil - harshal.patil@btbventure.com)

According to the Deloitte study "The Shift Index," publicly traded US companies' overall return on assets has declined to less than 1%, which is only a quarter of its 1965 level. With market power shifting to consumers and global competition growing fiercer, managers in nearly all industries face significant performance challenges. They must become more innovative in developing and implementing competitive strategies to reverse this trend. However, achieving sustained success will require more than just competitiveness. It will increasingly depend on the ability to generate new demand, as well as create and seize new markets.


  • Population: Approximately 333 million

  • Economy: $22 trillion, the world's largest economy.

  • Leading sectors: Petroleum, automotive, aerospace, telecommunications, lumber, mining, construction, and financial services.

  • Main exports: Refined petroleum, aircraft, helicopters and spacecraft, cars, crude petroleum, integrated circuits.

  • Main imports: Cars, crude petroleum, broadcasting and electrical equipment, computers, pharmaceuticals.

  • Main trading partners: Mexico, China, Canada, Japan, UK, and Germany.

  • Government: A federation of states, a federal republic, a democracy, and a presidential system.


Advantages of expanding into the US market include:


  • Logistics: The US has a well-equipped national and global supply network through air, sea, rail, and road transport, and half of the world's top 10 airports for moving cargo are in the US.

  • Market: The US has the world's largest economy, with a large private sector and consumer base.

  • Legal: There are low regulatory barriers to setting up a business, and the US Patent Office strictly enforces intellectual property rights.

  • Staffing: The US has over 5,000 universities and colleges that produce a large number of well-educated and skilled workers.

  • Business: All US-based businesses are treated equally, whether foreign-owned or not, and all 50 states are committed to attracting investment.

  • Locations: Expanding companies have unlimited choices and can benefit from a variety of geographical and climate characteristics that can best suit their line of business.

  • Attitudes: Innovation and new ideas are encouraged, and lines of personal communication are open and direct.

  • Benefits: Foreign companies can attract incentives such as tax credits and lower commercial real estate prices.


Challenges of entering the US market include:


  • Workforce: The cultural diversity of the US workforce can create challenges for incoming companies as it is very different from the largely culturally homogenous European employment market.

  • Taxation: The Internal Revenue Service strictly applies federal taxes, and there are also tax collection authorities at the state and local level.

  • Recruitment: Multinational corporations tend to choose the best candidates in the employment market, making finding the right fit for a company very competitive.

  • Bureaucracy: The steps needed to obtain property in the US involve multiple documentation procedures, and obtaining electricity connections can take up to two months to sort out.


Recent Posts

See All

Comments


bottom of page