RealTime IT News

Americans In Paris? No, Paris, London, Frankfurt, Say Analysts

[May 31] European management consultancy Roland Berger has said in a new report that successful U.S. Internet business models do not necessarily work in Europe.

After surveying 80 Internet companies based both in the U.S. and 15 European countries, the research firm found that businesses need a different strategy when they attempt to penetrate European markets.

Among Roland Berger's recommendations include rolling out the business in waves -- such as getting established in the U.K., Germany, and France simultaneously -- rather than the traditional country-by-country approach which analysts say is "a recipe for failure."

Eric Kintz, head of Roland Berger's e-commerce practice in the U.S., said that the European Internet space had radically transformed itself in the past six months and was now "operating on Internet Standard Time."

"Europe is adding its own flavor to the American model that made Silicon Valley successful: venture capital, IPOs and an appetite for risk," said Kintz.

Kintz urges American companies to look beyond the fixed wire Internet to the new mobile technologies that are being embraced in Europe.

"Until now the Internet has developed on PCs, but wireless (in Italy) and interactive digital TV (in France) are emerging as the primary access channels to the Internet," said Kintz.

65 per cent of respondents in the latest Roland Berger survey thought that they would be using mergers and acquisitions in order to penetrate new countries. Analysts pointed to a rapid consolidation of certain sectors of the Internet industry in Europe, particularly in online financial services and online auctions.

Above all, companies need to make themselves familiar with local purchasing patterns, regulatory systems and business styles, which differ from country to country. Diversity in Western Europe does not end with the 13 different languages that are spoken there.