[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.