How to get married in America: The DTI hopes to play the matchmaker with a service to help British companies find the proper partners when they go looking for an alliance in the US. Roger Trapp explains

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The Independent Online
NORTH AMERICA poses a curious challenge for the British business looking to expand. On one hand, its shared language and familiar culture should make it a straightforward market to crack. On the other, its sheer size and diversity have proved the undoing of many a company, particularly those involved in retail.

One way of avoiding some of these problems is to forge a link with a company that is based in the United States or Canada or at least has experience of the territory.

This approach has just been boosted by the establishment of the Strategic Alliance Service, which aims to act as a matchmaker for British companies looking across the Atlantic.

The scheme has been set up by the Department of Trade and Industry as part of its three- year North America Now campaign, launched last month with the intention of helping British industry to increase its presence in the United States and Canada and compete better.

Since the costs - both professional and management - of finding suitable overseas partners can be especially prohibitive for medium-sized companies, the DTI is targeting the scheme at organisations with annual turnovers between pounds 5m and pounds 50m and up to 500 employees.

Price Waterhouse, the international firm of accountants and management consultants, will manage and operate the programme on both sides of the Atlantic, with the aid of an annual subsidy of pounds 185,000 from the DTI.

John Peacock, corporate finance partner at PW, said: 'The US is quite a big market and it is difficult for medium- sized companies, in particular, to find the right partner. This service should help them find the right focus.'

The scheme will be highly selective and companies seeking help will have to supply suitable strategic alliance proposals. They will also need to demonstrate that they have the resources to fund the expansion. The DTI aims to accept 50 companies a year.

The programme is open to all sectors of industry. However, European Community regulations on state aid mean that it may not be possible to help all applicants from certain industries.

Strategic alliances are genuine partnerships between two organisations. They can take many forms, such as joint ventures, cross shareholdings or less formal co-operation agreements. But because they can be efficient means of developing markets, with the potential for high returns and lower risks, they can benefit to both sides.

Businesses applying for the programme are likely already to have some experience of North America and want partners for such activities as product development, marketing, licensing and franchising.

Apart from the application, there are four stages - or modules - to the programme, each of which is priced separately. The total cost to the company that goes all the way to being introduced to prospective partners is pounds 18,000 plus VAT.

However, the DTI claims that the careful design of the programme ensures that companies receive value for their money even if they pull out before completion.

Nevertheless, responsibility for the deal rests with the company. 'Neither the DTI nor PW can substitute for your own commercial judgement,' the brochure says. 'Any alliances into which you enter are entirely at your own risk, and must be based upon your judgement of the commercial benefits, the working style of the US management team and the compatibility of the US company with your own company.'

(Photograph omitted)

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