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SPI USA - IrvineSPI USA - Irvine
The United States Market Opportunities are The United States Market Opportunities are Too Attractive to DisregardToo Attractive to Disregard
SPI USA – Irvine2102 Business Center Drive, Suite 220EPhone: 949.253.5702E-mail: [email protected]
www.usaspi.com
Mark SpinoglioYour Partner in Innovation
United States
• Market Overview
Economic Factors
Demographics
• Import Trends
Trade Balance
Imports by Country
Trade Balance / Imports - Portugal
Sectors
Electrical Machinery & Components
Ceramic Products
Pharmaceutical Products
Chemical Products
Faucets, Plumbing, Manufacturing
• Market Approach
Developing Technologies
Traditional Product Lines
• Examples of Services Network with Technology Drivers
Develop Investor Interest
Develop Market Entry Strategies
Mark SpinoglioYour Partner in Innovation
General Points:
• 9,631,418 sq km, 2 ½ times the size of Western Europe
• 293 million population
• GDP of $10.99 trillion
• GDP per capita of about $37,800
• Population below poverty – 12 %
• Unemployment – 6 %
World Fact Book, CIA, February 2004
United States
Mark SpinoglioYour Partner in Innovation
Market Overview – Economic Factors
“For our part, the Federal Reserve will pursue its
statutory objectives of price stability and
maximum sustainable employment--the latter of
which we have learned can best be achieved in the
long run by maintaining price stability. This is the
surest contribution that the Federal Reserve can
make in fostering the economic prosperity and
well-being of our nation and its people.”
Alan Greenspan, Testimony before the Committee on Financial Services, U.S.
House of Representatives, Feb. 2005
Mark SpinoglioYour Partner in Innovation
Market Overview – Economic Factors
2004 Highlights:
• Business investment was the largest contributor
– upturn in business inventories and a step-up
in equipment and software.
• Consumer spending increased in purchases of
services and nondurable goods.
• Real disposable personal income increased.
Bureau of Economic Analysis, U.S. Dept. of Commerce, January 28, 2005.
Mark SpinoglioYour Partner in Innovation
Market Overview – Economic Factors
• Real growth in the service sector – accounting for about 2/3 of GDP –
continued trend of strong growth.
• Real growth in the goods sector – accounting for about 1/5 of GDP –
sharply increased in 2003.
• Goods sector decline in 2001 – due to a decrease in Real Value added
by Mining, Utilities, Manufacturing.
Bureau of Economic Analysis, U.S. Dept. of Commerce, Dec. 20, 2004.
Mark SpinoglioYour Partner in Innovation
Market Overview – Economic Factors
Bureau of Economic Analysis, U.S. Dept. of Commerce, June 2004
• Net investment position became $197.7 billion more negative from 2002 to 2003, due to large net foreign
purchases of U.S. securities (corporate bonds and U.S. Treasury securities).
• Appreciation of most foreign currencies against the U.S. dollar raised the dollar value of U.S. owned assets
abroad – U.S. held foreign stocks. The U.S. portfolio investment abroad resulted in a higher net value than the
foreign portfolio investment in the U.S.
• Foreign acquisitions of assets in the U.S. were $829.2 billion in 2003 – the second largest on record after
$1,046.9 billion in 2000.
Mark SpinoglioYour Partner in Innovation
Market Overview – Demographics
Population Density, 2000
Population Division, U.S. Census Bureau, Dec. 2004
Mark SpinoglioYour Partner in Innovation
Import Trends – Trade Balance
Is the U.S. Trade Deficit
Sustainable?
Institute for International Economics, Catherine L. Mann
Mark SpinoglioYour Partner in Innovation
Trade Gap Widens in 2004:
• The deficit increased $121.2 billion from $496.5 billion in 2003 to
$617.7 billion in 2004, as imports increased nearly twice as much as
exports.
• Largest increase in goods exports were in capital goods, industrial
supplies & materials, and consumer goods.
• Largest increase in goods imports were in industrial supplies &
materials, capital goods, and consumer goods.
• Deficit with China increased to $162.0 billion.
• Deficit with Japan increased to $75.2 billion.
• Deficit with the E.U. (25) increased to $110.0 billion.
Bureau of Economic Analysis, U.S. Dept. of Commerce, February, 2005.
Import Trends – Trade Balance
Mark SpinoglioYour Partner in Innovation
Import Trends – Imports by Country
U.S. Imports of “Harmonized System” Total All Merchandise in 2004
Ranking of import source countries:
Imports of HS TotalCountry (in thousands of $)
Rank
Canada 255,927,946 1
China 196,698,977 2
Mexico 155,843,011 3
Japan 129,594,660 4
Germany 77,235,716 5
Imports of HS TotalCountry (in thousands of $)
Rank
United Kingdom 46,402,188 6
South Korea 46,162,695 7
France 31,813,826 9
Portugal 2,243,100 58
Poland 1,828,701 61
Harmonized System – World Customs Organization
Office of Trade & Industry Information (OTII), Manufacturing & Services, International Trade Administration, U.S. Department of Commerce
Mark SpinoglioYour Partner in Innovation
Import Trends – Electric Machinery & Components
0500,000
1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,0005,000,000
1997
1998
1999
2000
2001
2002
2003
2004
Year
Val
ue
$ (i
n t
ho
usa
nd
s)
HS 8509 - ElectromechDomestic Appliances;partsHS 8501 - Electric Motorsand Generators
HS 8502 - ElectricGenerating Sets & RotaryConvertersHS 8512 - Electric Light EtcEquip; w indsh Wipers Etc.,PartsHS 8540 - Thermionic, ColdCathode or PhotocathodeTubes
Office of Trade & Industry Information (OTII), Manufacturing & Services, International Trade Administration, U.S. Department of Commerce
Trends in U.S. Imports of HS 85 - Electric Machinery & Components Sub Sectors
Mark SpinoglioYour Partner in Innovation
Office of Trade & Industry Information (OTII), Manufacturing & Services, International Trade Administration, U.S. Department of Commerce
Trends in U.S. Imports of HS 69 – Ceramic Products
Sub Sector
Import Trends – Ceramic Products
0
200,000
400,000
600,000
800,000
1,000,000
1997
1998
1999
2000
2001
2002
2003
2004
Year
Val
ue
$ (i
n t
ho
usa
nd
s)HS 6911 - CeramicTablew are Etc. ofProcelain or ChinaHS 6912 - CeramicTablew are, Kitchenw areEtc, Earthenw are Etc.HS 6909 - Ceramic Lab EtcWares, Agr Tubs Etc &Packing ArtHS 6913 - Statuettes andOther Ornamental CeramicArticlesHS 6910 - Ceramic Sinks,Washbasins, Water ClosetBow ls Etc.
Mark SpinoglioYour Partner in Innovation
Office of Trade & Industry Information (OTII), Manufacturing & Services, International Trade Administration, U.S. Department of Commerce
Trends in U.S. Imports of HS 30 - Pharmaceutical Products
Sub Sector
Import Trends – Pharmaceutical Products
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
Year
Va
lue
$ (
in t
ho
us
an
ds
) HS 3002 - Human Blood;Animal Blood; Antisera,Vaccines Etc.HS 3003 - MedicamentsNesoi of Mixtures, NotDosage Etc. FormHS 3004 - MedicamentsNesoi, Mixed or Not, InDosage Etc. FormHS 3005 - Bandages EtcCoated Etc or In RetailMedic Etc. FormHS 3006 - PharmaceuticalGoods; Sterile SurgicalItems Etc.
Mark SpinoglioYour Partner in Innovation
0
500,000
1,000,000
1,500,000
2,000,000
1997
1998
1999
2000
2001
2002
2003
2004
Year
Val
ue
$ (i
n t
ho
usa
nd
s)
HS 2814 - Ammonia,Anhydrous or In AqueousSolution
0
5,000
10,000
15,000
20,000
25,000
1997
1998
1999
2000
2001
2002
2003
2004
Year
Val
ue
$ (i
n t
ho
usa
nd
s) HS 2808 - Nitric Acid,Sulfonitric Acids
HS 3814 - OrganicComposite Solvents &Thinners, NESOI
Office of Trade & Industry Information (OTII), Manufacturing & Services, International Trade Administration, U.S. Department of Commerce
Trends in U.S. Imports of HS 38 & 28 - Chemical Products
Sub Sector
Import Trends – Chemical Products
Mark SpinoglioYour Partner in Innovation
NAICS – North American Industry Classification System
Office of Trade & Industry Information (OTII), Manufacturing & Services, International Trade Administration, U.S. Department of Commerce
Trends in U.S. Imports of NAICS 332 – Fabricated Metal Products
Sub Sector
Import Trends – Faucets, Plumbing, Manufacturing
0
5,000,000
10,000,000
15,000,000
20,000,000
1997
1998
1999
2000
2001
2002
2003
2004
Year
Val
ue
$ (i
n t
ho
usa
nd
s)
NAICS 3329 - OtherFabricated Metal Products
Mark SpinoglioYour Partner in Innovation
Steps to Market Penetration and
Ultimately Market Success:
• Study your competitors
• Know your market (pricing, trends)
• Strategic planning
Market Approach
Developing Technologies
Traditional Products
Mark SpinoglioYour Partner in Innovation
Approach to the U.S. Developing Technology Market:
Market Approach – Developing Technologies
Drivers of New Technologies
Knowledge Centers
Applications in Public /
Private Sector• Department of Defense
(DOD)• Department of Energy
(DOE)• National Science
Foundation (NSF)• National Aeronautics
and Space
Administration (NASA)• National Institute of
Standards and
Technology (DOC)
• Engineering Research
Centers (NSF)• National Laboratories
(DOD, DOE, NSF)• Industry/University
Cooperative Research
Centers, I/UCRC (NSF)
Mark SpinoglioYour Partner in Innovation
Drivers of New Technology:
(R&D budgets ‘ 05)
• Department of Defense - $43 billion• Department of Energy - $3.4 billion• National Science Foundation – $4.2 billion• National Aeronautics and Space Administration - $11.1
billion• National Institute of Standards and Technology (DOC) -
$695 million
• Total Federal R&D Portfolio for 2005 is estimated at
$131.5 billion.
Market Approach – Developing Technologies
Mark SpinoglioYour Partner in Innovation
Engineering Research Centers:
• There are currently 20 ERC’s within four general topic areas:
• Bioengineering (6 ERC’s)
• Design, Manufacturing, and Product Development Systems (5 ERC’s)
• Earthquake Engineering (3 ERC’s)
• Microelectronic Systems and Information Technology (6 ERC’s)
Market Approach – Developing Technologies
ERC’s are supported by various
sources of funds:
• NSF (the largest contributing
entity)
• Industrial partners
• Host academic institutions
Mark SpinoglioYour Partner in Innovation
National Laboratories (18):
• 17 Department of Energy:
– Lawrence Livermore National Laboratory: energy, environment, bioscience, biotechnology.
– Los Alamos National Laboratory: nuclear weapons and strategy.
– National Renewable Energy Laboratory: solar, biomass, wind, geothermal, advanced vehicles & fuels.
– Princeton Plasma Physics Laboratory: fusion science.
• 1 National Aeronautics and Space Administration:
• Jet Propulsion Laboratory: technologies developed for space.
Market Approach – Developing Technologies
Spirit & Opportunity Mars
Rovers
Mark SpinoglioYour Partner in Innovation
Industry/University Cooperative Research Centers, I/UCRC :
There are currently 50 I/UCRC’s within eleven general topic areas:
• Advanced Electronics (4)
• Advanced Manufacturing (4)
• Advanced Materials (7)
• Biotechnology (4)
• Civil Infrastructure Systems (3)
• Information and Communication (9)
• Energy and Environment (4)
• Fabrication and Processing Technology (9)
• Health and Safety (3)
• Quality, Reliability and Maintenance (2)
• System Design and Simulation (1)
Market Approach – Developing Technologies
Organized research units with strong
industry guidance and financial
support:
• 75 % of budget must be supported
by a minimum of 6 companies.
• 25 % of budget supported by NSF.
• University based / cross-discipline
activities.
Mark SpinoglioYour Partner in Innovation
Main conclusions from our activities:
• Knowledge Centers are an excellent point of contact for leading edge R&D (public/private sectors).
• Knowledge Centers can provide the industry networks to market developing technologies.
• Since the mid 1980’s Portugal has focused its technology developments with other Member States – away from the U.S.
• A strong interest from U.S. R&D to establish collaborations in Europe – can lead to unique technology markets for Portuguese entities.
Market Approach – Developing Technologies
Mark SpinoglioYour Partner in Innovation
Reverse Supply Chain Approach:
Market Approach – Traditional Product Lines
Retail DistributionManufacturer
/ Producer
• Discount• Warehouse• Department Stores• General
Merchandise• Specialty Stores• Mail Order /
Internet Based
• Regional Agents• Importers /
Distributors• Retail Buyers
• U.S. Based• Foreign Based
Mark SpinoglioYour Partner in Innovation
Retail Channel:• Discount – Dollar General
• Warehouse – Sam’s Club, Costco, Home Depot
• Department Stores – Macy’s, Kohl’s
• General Merchandise – Sears, Roebuck & Co., Bed Bath
& Beyond, J.C. Penney
• Specialty Stores – Pier 1, Williams-Sonoma, Pottery
Barn
• Mail Order / Internet Based – B2C’s
Market Approach – Traditional Product Lines
Product Pricing
Product Trends
Promotional Activity
Added value due to
manufacturing region,
brand, etc.
Mark SpinoglioYour Partner in Innovation
Distribution Channel:• Regional Agents – Large national retailers
• Distributors / Importers – Medium / small
retailers, normally regional retailers
• Retail Buyers – Large / Medium retailers, in
large markets
Market Approach – Traditional Product Lines
Leading Distribution
channel by retail segment Importer/Distributor/Buyer
interests (designs/patterns) Decision Factors – Price,
Quality, Manufacturing
Region, Etc.
Mark SpinoglioYour Partner in Innovation
Manufacturer / Producer Channel:
• U.S. Based – as seen by the Import Trends, U.S.
based manufacturers are being replaced by
foreign suppliers.
Market Approach – Traditional Product Lines
Percent of market by
global region Leading manufacturers
by global region
Mark SpinoglioYour Partner in Innovation
Main conclusions from our activities:
Market Approach – Traditional Product Lines
• Large retailers are accessible through their Corporate Buyers.
• “Made in the US” does not provide added value.
• Importers / Distributors are open with information – (i.e. pricing, product styles, regions of interest).
• Market Approach varies depending on the product
– national or regional focus
– need for local customer support
• A U.S. presence exists (SPI) to support your business needs.
Mark SpinoglioYour Partner in Innovation
Examples of Services
SPI’s presence in the U.S. provides
an ability to:
• Develop Collaborative
Opportunities
• Develop Investor Interest
• Develop Market Entry Strategies
Mark SpinoglioYour Partner in Innovation
Examples of Services – Develop Collaborative Opportunities
Objectives - Identify needs and subsequent opportunities for collaborations
between Portuguese and American companies and other relevant organisations (universities, research centres, and science parks) within specific sectors:
- Information Technology
- Biotechnology
- Materials, Moulds & Polymers
- Environmental Technology
- Create an overview of key policies, programs and institutions that have successfully promoted innovation activities in Portugal and the US.
- Develop project summaries that leverage the identified opportunities.
Mark SpinoglioYour Partner in Innovation
Examples of Services – Develop Collaborative Opportunities
Sector Opportunities
Needs and subsequent opportunities for collaborations:
- Identify companies and relevant organisations active in the innovation area.
- Survey the identified companies and relevant organisations for opportunities that would benefit through collaborations with the US.
- Assess and structure the identified opportunities.
- Develop an overview of the current level of activity and potential for international collaborations to the benefit of Portuguese companies.
Mark SpinoglioYour Partner in Innovation
Examples of Services – Develop Collaborative Opportunities
Relevant Best Practice Case Studies
Overview of key policies, programs and institutions that have successfully promoted innovation activities:
- Identify effective policies, programs and institutions.
- Develop a detailed understanding of the factors for success through interviewing key representatives.
- Identify cases of successful collaborations between Portuguese and US organisations.
- Develop detailed Case Studies (10) that will encourage further collaborations within the selected sectors (4).
Mark SpinoglioYour Partner in Innovation
Examples of Services – Develop Collaborative Opportunities
Recommended Projects
Project summaries that leverage the identified opportunities:
- Select the opportunities that have the greatest potential for success.
- Develop project summaries (4) that include: objectives, methodology, and the suggested international consortium.
www.usaspi.com/projects/Flad.pdf
Mark SpinoglioYour Partner in Innovation
Examples of Services – Develop Investor Interest
Main Objectives:
- Identify U.S. based company’s that have an interest in developing business opportunities in the E.U.
- Develop “Statements of Interest” for the selected high potential opportunities.
APPROACH POTENTIAL INVESTOR’S
ONSITE VISIT
SELECTION PROCESS
STATEMENTS OF INTEREST
Mark SpinoglioYour Partner in Innovation
Examples of Services – Develop Investor Interest
- Develop investor profiles specific to four (4) targeted sectors.
- Select investor’s that match the sector specific profiles.
- Approach potential investors and develop initial interest:
Access to the Portuguese and other European markets
Technology transfer to and from Portugal
Access to a highly educated labor workforce (i.e. Biotechnology & Information Technologies)
APPROACH POTENTIAL INVESTOR’SAPPROACH POTENTIAL INVESTOR’S
Mark SpinoglioYour Partner in Innovation
Examples of Services – Develop Investor Interest
ONSITE VISITONSITE VISIT
- Visit potential investors that respond with interest. The objective of the visits will be to further determine the level of interest and assess the true opportunity.
Note:
The Irvine and Baltimore offices are well located for this service.
Mark SpinoglioYour Partner in Innovation
Examples of Services – Develop Investor Interest
- Select a manageable group of potential investors to further develop the investment opportunities.
The selection is based on:
The level of interest and opportunity determined by the individual visits.
The potential interest of Portuguese entities to be determined by the client.
SELECTION PROCESSSELECTION PROCESS
Mark SpinoglioYour Partner in Innovation
Examples of Services – Develop Investor Interest
STATEMENTS OF INTERESTSTATEMENTS OF INTEREST
- Investor Profile
General Business Plan
Products/Services
Infrastructure
- Opportunity
Detailed Description (objective, methodology overview, expected short/medium/long-term results)
US investor’s contribution
Portuguese entity (client) contribution
Mark SpinoglioYour Partner in Innovation
Examples of Services – Develop Market Entry Strategies
Main Objective:
Identify and analyze the necessary requirements to create or reinforce the client’s presence in relevant U.S. markets.
United States Market Strategy
Business Profile and International Goals
United StatesMarket
Mark SpinoglioYour Partner in Innovation
Examples of Services – Develop Market Entry Strategies
Business Profile and International Goals
- Develop an understanding of the Client’s relevant activities and structures.
Products / Services
Current Markets
Distribution Channels
Sales & Marketing Structure
- Develop an understanding of the Client’s international activities and goals for the North American Market.
Mark SpinoglioYour Partner in Innovation
Examples of Services – Develop Market Entry Strategies
- Develop an overview of the United States market, focusing attention to the Client’s product line.
Market Structure
Distribution Channels
Pricing
Principal Importers and National Producers
Positioning of the Client’s Products
United StatesMarket
Mark SpinoglioYour Partner in Innovation
Examples of Services – Develop Market Entry Strategies
United States Market Strategy
- Develop a strategy that leverages the United States Market to meet the Client’s international goals:
Select Alternative Sales Channels
Analysis of the Opportunities
Develop Conclusions and Recommendations
Mark SpinoglioYour Partner in Innovation
United States
Mark SpinoglioYour Partner in Innovation
USA Contacts
USA - Irvine2102 Business Center Drive, Suite
220E
Irvine, CA 92612
Tel: +1 949 253 5702
Fax: +1 949 253 5703
USA Inc.
5523 Research Park Dr., Suite 325
Baltimore, MD 21228
Tel: +1 443 543 5530
Fax: +1 443 543 5533
California Maryland
USA EUROPE CHINA
www.usaspi.com