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Country Commercial Guide - Doing Business in the UK

Introduction to the UK Country Commercial Guide 2011

The Country Commercial Guide (CCG) is a comprehensive annual review of the United Kingdom's commercial, economic, political and investment environment.  The information contained in the CCG will assist U.S. companies who wish to do business in the UK.  Below you will find the introductory chapter of the CCG, which includes the UK market overview, its challenges, opportunities and market entry strategy.  The remainder of the CCG consists of the following chapters:

  • Political and Economic Environment
  • Selling U.S. Products and Services
  • Leading Sectors for U.S. Export and Investment
  • Trade Regulations and Standards
  • Investment Climate
  • Trade and Project Financing
  • Business Travel
  • Contacts, Market Research and Trade Events
  • Guide to Our Services

Download the full 2011 guide with easy access to Chapters above: 

UK Country Commercial Guide 2011.pdf

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Market Overview

  • The United Kingdom (estimated 2010 GDP of $2.3 trillion) has the sixth-largest economy in the world, the third-largest economy in the European Union, and is a major international trading power. 
  • Highly developed, sophisticated, and diversified, the UK market is the largest in Europe and the fifth largest in the world for U.S. goods exports.
  • With few barriers, the UK is the entry market into the EU for more than 40,000 U.S. exporters.
  • The UK is the single largest export market for U.S. services exports.
  • Annual U.S. exports of both goods and services are valued at more than $100 billion.
  • Major categories of U.S. exports include aerospace, automotive, electronics, healthcare, information technologies, telecommunications, and safety/security equipment.   
  • The UK is the number one overseas market for travel to the United States, and nearly 4 million UK travelers visited the United States in 2010.
  • The U.S.-UK investment relationship is largest in the world with a cumulative bilateral stock in direct investment valued over $925 billion.
  • Over two million jobs, about one million in each country, have been created over the years to manage and drive this investment.
  • Over 7,500 U.S. firms are present in the UK, and the UK is the top location in Europe for U.S. regional headquarters covering Europe, the Middle East, and Africa.
  • London is a major international transportation and financial hub.

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Market Challenges

  • While the UK economy grew overall by 1.7% in 2010, GDP contracted by 0.5% in the fourth quarter of the year, reflecting continued weakness in the economy.
  • The current limits on availability of credit in the UK economy represent a challenge for many businesses.
  • The relatively weak British Pound affects the buying power of British importers.
  • Weak consumer confidence continues to dampen retail sales, making some retailers reluctant to commit to new products and lines.
  • Despite the relatively strong dollar, London is still one of the world’s most expensive cities.
  • As UK and third-country suppliers represent strong competition, U.S. exporters will need to offer competitive prices and terms.
  • Complex EU technical/regulatory requirements can be burdensome.
  • “Devolved Administrations” present some differences in policies/regulations among Northern Ireland, England, Scotland and Wales.
  • The coalition government is implementing a program of deep cuts to the public sector that is also dampening wider consumer and business sentiment.

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Market Opportunities

The UK is a highly sophisticated market with strong demand for products and services that improve productivity, including ICT software and services that lower costs and improve business efficiencies.  

  • There is ongoing, strong demand for a wide range of equipment and services for safety/security and, in particular, for IT and cyber security.  
  • Green Opportunities: The UK Climate Change law is the world’s first long-term, legally binding framework to address climate change through renewable energy with a target of 26% reduction in greenhouse gas emissions by 2020, and 80% by 2050.
  • UK commitments to low-carbon targets are driving market demand for U.S. products and services in renewable energy/low carbon/green technologies.
  • Special infrastructure projects, including the 2012 London Olympics, continue to generate demand for a wide range of U.S. products and services, including safety/security equipment.
  • UK travel to the U.S. remained stable in 2010, and many experienced UK travelers will continue to visit new and repeat destinations in the U.S. 

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Market Entry Strategy

  • Demonstrate a clear competitive advantage (i.e., price, quality, branding).
  • Pay close attention to both the obvious and subtle cultural differences between the U.S. and the UK and adjust marketing strategies accordingly.
  • Evaluate prospective partners carefully and choose an experienced, well-established local distributor.   
  • Be flexible working with a UK partner during this challenging period of economic recovery.
  • Express commitment to the market with a long-term perspective.

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