Entering the American market can be achieved through either the purchase of an existing entity (the “buy” option) or the creation of an entirely new one (the “build” option). Buying can be attractive because the purchased company will have already incurred most of the start-up costs and risks. While generally reflected in the acquisition price, the buyer acquires a going concern with all of its work force and assets in place.
Having senior management in place and being integrated into a particular community can be of significant benefit in dealing with cultural barriers to foreign investors entering the U.S. economy. When opting to “build,” the market entrant usually already has a strong existing brand and business structure, which it is more advantageous to leverage. Other viable ways to enter the U.S. market with less initial investment include joint ventures or alliances with American companies.