Selling Aerospace and defense software in Europe

4 important questions you need to ask yourself.

Many companies still struggle when it comes to entering a new market. While the USA is one big market, Europe is made up of 44 countries with each speaking their own unique languages. Software solution providers might have slight advantages to selling solutions as compared to other companies who are trying to enter the market. However, this doesn’t make the market entry very smooth. 
 

As a software solution provider, you do not have to worry about the cost of inventory, warehousing, and a few others. But you will have to worry about how to get the right sales team and having the right software for the target market. 

In this blog, we will help the software companies that supply to the A&D market become better at selling their product within Europe.

The European A&D market 

The market is antipcated to grow at  CAGR of over 2.4% during the forecast period (2020-2025). In 2020, the european A&D market experienced a drastic increase in the demand for commercial and military aircrafts. Players such as Rolls Royce, Leonardo and BAE systems, also increased the regional research and increased their investment in manufacturing. The European union has created a strategy for smart, sustainable and inclusive growth. Several north American manufacturers in the industry have developed softwares that contribute to the telecommunications, navigation and earth observations for the European market.

Several trends are affecting the growth of aviation software within Europe; including;

  1. The continuous rise of small aircrafts,
  2. The growing need for new technologies,
  3. Increase in material development such as zero-fuel aircraft, use of graphene and carbon nanotubes and electrifications, and many others 

For the purpose of your success into Europe, you will need to answer the following questions.

1. Is there demand for your software in Europe?

Most companies try to assume that there is a need for their software everywhere. In Europe, the geographical divisions make it complicated to understand whether a market is suitable for your solutions or not. The European aerospace and defence market consists of aircrafts, weapons, artillery tanks, radars and other milirary and aircfraft components. 

As an American software solution provider, you should understand that having a small community of advocates in a region can be a stepping stone to build your brand awareness within Europe.

In Europe, most companies or potential customers require a test, a model, an experiment, or a prototype of the solution before they can attest to being advocates or customers. Hence, if you have no experience in the market, plant a “seed” before attempting to sell. This might even be complicated if your solution is for Aerospace and defense.

1. Your solution should be fully working before you get advocates. In the A&D industry, there is limited room for experiments.

2. You might need the big advocates in the aerospace industry to vouch for you. For instance BAE, Airbus, or any other notable leader in the industry.. 

2. Do you have the right team to expand? 

Unlike components, equipment and other physical products, software is hard to sell. Aviation software is even harder to sell. It is important to strategically create an executive body that entails a CXO level in charge of European expansion before local hires are made. For your aviation software, your company needs a general manager, who is well versed with international expansion. Without the proper management team, your company will experience all kinds of problems and might end up failing to conquer the European market.

While management is key, it is also good to have a strong sales team to help the company in crossing borders. Who is going to sell your software to aviation companies? Researching the European aviation sector is key to knowing what kind of skills your team might need.

Most companies expand by hiring a European business development company to take care of their European sales and business.

3. How important is European expansion for your company?

Because aviation entails cross-border movements, the most probable explanation is expansion. When it comes to aerospace and defense, Europe is a major player in this industry. The region is home to some of the largest players, for example, Rolls Royce, Safran, Thales, BAE, and Leonardo. Due to the unique economic design of the European market, companies have a vast array of possibilities to realize business performance across Europe. In the past decade, all the four subsectors, which are civil aeronautics, land, and naval military aeronautics, and space, experienced an increase in the turnover.

As a software solution provider in the aerospace and defense industry, you might want to have a slice of this growing industry.
If you are a successful company in the US with a proper strategy and the capacity to expand, it will be easier to succeed in the European market.
However, if you have not found a proper strategy to make the business work in your own market (USA), it will be hard to enter the market successfully.

If after a successful market entry in the USA and considerable years of stability, you can always outsource the European activities to business development companies. Such companies will cover your market research, lead generation, and operate on your behalf.

4. Is your company well-funded and willing to do an investment?

Most American companies assume that success in the USA is equivalent to Europe. In a realistic sense, it might take a well-formulated company five to six years to master a proper strategy for carrying out business in Europe. Henceforth, it is relevant to know that you require a substantial amount of investment and patience to enter the market.

Selling software solutions in the aerospace and defense industry requires upfront investments that include senior people on the ground. There should be enough resources for research, European travels, digital marketing, and many other aspects.

 

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About EuroDev

EuroDev, established in 1996 with offices in The Netherlands and France, has a single, defined purpose to help mid-sized North American companies expand their business in Europe. We have created a proven, successful business development model and since our founding, have partnered with over 300 companies to help them define and meet their European business goals. Services provided include Sales Outsourcing, HR Outsourcing, and Digital Marketing.

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