Entering a new market can present hurdles that demand nimble and decisive action. It is important to define a vision and map out a plan to reach your goals. This can be challenging if there are many paths you can take. Some companies are overwhelmed with options, which can lead to indecision. But taking no action and being indecisive is worse than exploring new options as they arise.
Take, for example, Aleandri. Aleandri S.p.A. designs and builds large infrastructure projects in Italy, such as roads, motorways, airport runways, and railways, complete with all connected and additional works for both public and private customers. They also have precast expertise with elements to speed up roadwork construction.
Problem
With their years of success, Aleandri knew they wanted to expand to the U.S. However, they lacked a clear vision of their U.S. market entry strategy due to the large array of opportunities the market presented and the diverse expertise of the parent company.
MI’s Solution
MI offered support and counsel through our International Business Incubator (IBI) program and assumed fractional, temporary roles as the CEO and Director of Operations for the newly formed Aleandri Group, Inc. MI’s team completed in-depth market research to assist with defining the vision and presented a go-to-market plan to the company’s investors. Support continued in the years to come as the company seized new opportunities, pivoting slightly from the original plan, but with the same endgame in mind.
Deep Dive
Deciding on a path
Aleandri S.p.A. started their foreign direct investment venture with full confidence due to their organization’s success in Italy. With nearly 60 years of experience specializing in infrastructure, they realized they were reaching their limit of expansion within their home country. Naturally, they set their sights on the U.S.
But how should they expand? Options like acquiring a U.S. company, creating a joint venture, building an organization from scratch, or entering with ready-made precast products for the construction industry all seemed fraught with unknown variables. And, as Aleandri delved into potential market entry strategies, the complexity of each option quickly became apparent.
Adding to that, the regulations and requirements in the U.S. differed from their home market. For example, they faced a challenging hurdle posed by the stringent requirements set by the U.S. Department of Transportation (DOT). In addition, the competitive nature of the U.S. construction industry, which is heavily reliant on established relationships, posed a formidable obstacle for a foreign entrant like Aleandri.
To navigate this intricate landscape, Aleandri turned to MI, drawing on our expertise garnered over nearly two decades of aiding foreign companies in entering the U.S. market. The pivotal moment occurred when Aleandri engaged MI to conduct an in-depth market study. Focusing on Aleandri’s core competencies, particularly their engineering expertise on infrastructure projects, their ability to optimize construction costs, and knowledge of the precast industry, as well as the critical success factors for the U.S. market, MI’s research aimed to chart a clear strategic direction for their U.S. subsidiary. MI presented a 5-step plan to get to the ultimate goal of having a precast plant in the U.S.
Taking a detour
It’s not uncommon to view opportunities outside your primary focus as potential distractions. Yet, exceptions arise that warrant serious consideration. This was precisely the approach MI took in the case of Aleandri. While completing the Market Study, Aleandri was approached by another U.S. Italian foreign direct investment (FDI) venture seeking assistance in constructing a warehouse extension. Although warehouse construction wasn’t initially on Aleandri’s radar, the project underwent an evaluation to determine its potential in laying the groundwork for future success.
This particular scenario allowed for hands-on experience for the U.S. team, specifically providing an opportunity to train Aleandri’s Italian engineers in U.S. construction best practices and terminology. Moreover, Aleandri would be able to establish the U.S. entity with a guaranteed client. Having an immediate revenue source would reduce start-up costs and allow Aleandri to build its construction and credit resume in the U.S. As such, the project could potentially count towards requirements for prequalification or shortlisting on infrastructure projects in the future.
In the end, this project led to a few others that kept cash coming in while Aleandri narrowed its focus on supplying precast for the U.S. market. Having boots on the ground gave them a successful start and informed their later decisions on what they truly wanted to accomplish in the U.S.
Crossing the bridge
MI consultants assumed fractional roles within Aleandri Group, Inc., with one senior manager acting as CEO and another as the Director of Operations during the initial warehouse construction project. This allowed MI to assess existing processes brought over from the parent company, identify critical flaws with regard to functioning in a new/foreign market, and leverage the NC and SC general contractor license of our Director of Operations for their initial projects. Additionally, we facilitated bonding capacity and insurance, enabling Aleandri Group, Inc. to meet bid requirements and secure smaller infrastructure projects.
MI’s marketing department also played a vital role in adapting collateral from Italy for the U.S. market. This helped the company present its ideas, products, and services at tradeshows to garner more attention. Furthermore, with MI’s support, Aleandri was able to bring over seasoned employees for the U.S. operations and—most importantly—gained the time needed to build crucial relationships, ultimately resulting in successful projects.
On solid footing
While their initial market entry plan was anchored in the assumption that general contracting work would fuel the venture, a series of strokes of luck and strategic decisions propelled the subsidiary forward. 5 years after establishing itself in the U.S., Aleandri realized its ultimate vision, evolving into a precast manufacturer in the U.S. Serving as the major shareholder, Aleandri founded Italian Precast Design (IPD), a U.S. LLC, in collaboration with other major companies in related industries.
Being in the U.S. with their first subsidiary opened doors that made this partnership possible but also illuminated a growth trajectory for the future. Recognizing a demand for prefabricated modular buildings amidst the current construction boom in the U.S., Aleandri drew upon their parent company’s wealth of knowledge in infrastructure development and precast solutions to address this need.
In addition, this new venture seamlessly aligned with Aleandri’s long-term ambitions, firmly placing them on a path that was one of their options from the beginning. The shift from traditional construction and infrastructure projects to the future of precast building design through IPD exemplifies the way their resilience and adaptability facilitated a pivot toward a more successful future.
IPD has now completed its first project, a 20k sqft addition for a client using precast-engineered solutions. With cost savings of at least 20% and a reduction in completion time, it is clear why clients are lining up. Now, Aleandri is on an upward trajectory, both due to their own resourcefulness and the strategic consultancy provided by MI. While Aleandri established and nurtured crucial working relationships, MI played a pivotal role in providing stability for the U.S. subsidiary, enabling it to remain in the U.S. market long enough to build these relationships.
Key Learnings
The case study of Aleandri Group, Inc. and IPD emphasizes that the path to your end goal may not be straight and simple. There will be challenges and options that could lead to indecision or could fuel your growth in a new market. The U.S. tends to reward action. In Aleandri’s case, seizing the initial warehouse building project, which some may have viewed as a distraction, opened several other doors for the company, which ultimately led to them realizing their dream. Indecision, on the other hand, wastes valuable time and resources.
This case study also highlights the crucial role played by consultants like MI in not only providing strategic support but also the necessary stability to find footing in a new market. By recognizing the need for expert guidance, adapting work processes, and enabling effective decision-making, organizations can successfully navigate the challenges of entering the U.S. market, driving growth and profitability.