Case study panel 1 Palo Alto

Cell Battery, Inc. a California company, formed six years ago has seen increasing acceptance of its technology in the United States. Its technology doubles cell phone battery life and US sales have been increasing annually since inception.

The president of Cell Battery decided that with a firm footprint in the US market, it is time to expand internationally. This decision is supported by the fact the company received inquiries about its product after it was profiled in a leading technical journal.

Expanding internationally represents major challenges and opportunities for Cell Battery. While its sales force is experienced in the US market, it has no international experience. Management is certain that its technology will be accepted in Europe as well. To explore the European marketplace, the company plans to attend an IT tradeshow next year in Hannover, Germany. Cell Battery's CFO estimates that exhibiting at this tradeshow and the related travel expenses will cost at least $100,000. Unfortunately, there is no one on the company's sales team who has either the time nor the experience to coordinate the logistics of attending this tradeshow, or to analyze the European marketplace in advance of the show.

Depending on the outcome of the tradeshow and the contacts made, Cell Battery may start its European expansion with a small sales office. Management believes that a sales "super star" within the European industry may be a logical choice to head up these efforts as European VP of Sales and Development. However, Cell Battery needs to devote resources to mission critical tasks, such as sales and marketing, without creating a large administrative infrastructure. At the same time, prompt access to accurate financial data and complying with local laws and regulations is crucial.

There are no venue preferences for its European office. It may turn out to be the home country of European VP of Sales and Development. Cell Battery's CFO is uncertain what legal status its European operations should adopt and what the potential tax implications are in this regard.