Foreign Companies Should Harness Their U.S. Brand Power

The fact that the ranks of upscale American consumers are comfortably spreading their wealth around these days is another attraction to foreign companies looking for reliable expansion opportunities.

But to succeed in the U.S. today the way non-U.S. brands such as Hyundai, Samsung and Corona already have, a new analysis by a top-tier branding consultancy says CEOs of these companies must learn to “harness the power of the brand” rather than take the previous path of expansion in the U.S. through largely “brandless” investment growth that depended mainly on good timing for companies’ invasion of the American market or on a commodity strategy based on low prices.

Unless CEOs “recognize and act upon the importance of building strong ‘brands,’ they will most likely fail to achieve their U.S. objectives,” write John Grace and Russ Ackerman. Grace is president and founder of Brand Taxi and a former Interbrand consultant, and Ackerman is a consultant with Brand Taxi. “Brands have become the primary differentiator and a way for companies to garner the attention of customers, consumers and the trade.”

Grace and Ackerman argue that the major shift toward U.S.-based expansion by high-growth market-based companies in China, India, Brazil and other previously high-flying emerging markets makes sense. The logic includes their drive for greater revenues and profits, the large American middle class with strong per capita income, recognition of the stability of U.S. government, economic incentives for locating in a particular state or locality, access to important factors such as skilled labor forces and strong distribution channels, and a high number of “diaspora” consumers from the companies’ home countries living in America and often becoming the first wave of “acceptors.”