A well-established European manufacturer of on-demand customization technology saw clear potential in the U.S. market, which generated over $3 billion in revenue in 2023 alone. To move quickly and seize the opportunity, the owners asked a trusted industry sales contact to launch and run their U.S. subsidiary. Their go-to-market plan was to bypass distributors and sell directly to American customers, sacrificing a level of control for greater agility in the U.S. market.
Problem
Key functions, from banking to communications accounts, were set up in the U.S. manager’s personal name. The owners had no passwords and no bank access. When performance issues began to surface, the company found itself with no real visibility—and no clear way to intervene without risking total disruption. Combined with the question of how best to handle the U.S. market, the owners felt helpless.
MI’s Solution
MI was brought in to stabilize the situation, restore control to the parent company, and put the structure in place to support informed decision-making. We began by auditing the company’s U.S. financials and processes. Our team then stepped in to supervise operations on an interim basis, helping transfer ownership of key assets from the individual to the business, all while reporting directly back to the company’s European leadership.
Deep Dive
Placing full operational control in the hands of one individual, without established oversight or alignment on roles, responsibilities, and budget, left the company exposed. The manager brought impressive industry credentials, yet launching a cross-border venture requires more than technical expertise; it calls for fluency in corporate governance, U.S. regulations, and the fine art of serving both a global brand and local stakeholders on a lean budget. U.S. subsidiaries must balance global brand rules, local regulations, and lean budgets, often while posting early-year losses. It’s a delicate equation—and cross-border experience matters.
At first, the parent company accepted the manager’s approach—bank accounts in his own name, informal reporting lines, minimal documentation—hoping the agility would translate into rapid U.S. revenue. Instead, each shortcut quietly shifted power away from the parent company. The manager became the sole officer on the Articles of Incorporation, the only signer on the bank account, and the single voice authorizing expenses. With no board-level budget and no real-time dashboards flowing back to Europe, decisions went unchallenged and unseen.
It quickly became apparent that the company’s U.S. subsidiary existed in name only. All major accounts, including the business’s Amazon presence and utility bills, were personally tied to the U.S. manager. Even the company’s bookkeeping was being handled by a family member of the manager, raising questions around financial transparency. Due to the manager being the sole signer on the bank account, the parent company was unable to access funds or make changes to users on the bank account. Soon the parent company faced an agonizing dilemma: replace the manager and risk stalling operations or stay sidelined while sales declined.
Restoring Oversight and Control
MI arrived just as the parent company felt backed into a corner—performance issues were mounting, yet replacing the U.S. manager seemed too risky to contemplate. From the very first call, our team eased those worries by living our company values, demonstrating that every step would balance respect for people while also protecting the business.
We then set about untangling each critical asset—bank credentials, e-commerce logins, utility accounts—and shifting them from personal custody to the U.S. subsidiary, where they belonged. By positioning ourselves as a resource for the U.S. manager as part of an expansion of the team in the U.S., we treated the manager as a teammate, not an obstacle. This collaborative approach, coupled with leveraging our years of experience as an International Business Incubator to softly, but firmly, explain why changes needed to be made, ultimately made us successful. By keeping the conversation centered on solutions rather than blame, we earned cooperation and, ultimately, trust.
We also put controls in place to ensure the parent company could track spending, monitor sales activity, and make adjustments in real time—without relying solely on internal reports from the U.S. office. These controls gave headquarters real-time oversight without slowing local decisions. When the owners later chose to part ways with the manager, the handover was seamless. Customers noticed no disruption and the company regained the clear line of sight it needed to steer U.S. growth with confidence.
Planning the Pivot
Once stability was restored, the company stepped back to reassess its U.S. strategy and found that it all came down to one question: Is a direct-to-consumer play our best path in the United States? A new sales-focused manager was appointed while MI continued to handle back-office functions, yet revenue remained flat and operational strains in technical support and fulfillment persisted. Prospective distributors also expressed reluctance to carry a brand that might compete with them through direct online sales.
With MI’s guidance, the company made the strategic decision to dissolve the U.S. subsidiary. The parent company found it was better positioned to serve it’s U.S. clients through partnerships with North American distributors. This allowed the company to reduce risk, avoid overextending its European team, and focus on higher-volume sales—all while preserving a steady U.S. revenue stream.
A distributor-only model is not appropriate for companies that require local customer service and technical support, or strict control over brand presentation. For the company, however, the pivot replaced operational complexity with sustainable scale and positioned the business for consistent growth in the U.S.
Key Learnings
This company’s experience shows that market-entry plans often need mid-course corrections—and recognizing that fact early saves time, money, and relationships. The root issue was structural, not personal: too much authority rested with a single manager who lacked experience in subsidiary governance. Clear safeguards, such as naming a parent-company officer as co-signer on every U.S. account, would have kept visibility intact from day one.
The second lesson is strategic. A direct-to-consumer model can look appealing, yet it demands significant staffing, service infrastructure, and may alienate potential distributors. By pivoting to a distributor-only approach, Company P exchanged a measure of control for a leaner, lower-risk path to U.S. revenue.
Curious whether your own U.S. strategy could benefit from a mid-course correction? Let’s talk.
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