BDO Ambition Survey 2011 - Global opportunities

BDO AMBITION SURVEY 2011
Global opportunities
SUMMARY OF GLOBAL RESULTS
BDO / Strategy One
September 2011

METHODOLOGY
All survey respondents and companies were required to satisfy specific criteria:
C-suite CFOs, FDs and other Heads of Finance - all reporting to the CEO
Have global revenues of between US $50m – US $1bn
Have international offices outside their headquartered country
Expect revenues representing the international side of their businesses to account for a higher or about the same proportion in the next 3 years
Companies operating in one of the following sectors or industries: Financial services, Manufacturing, Real estate & construction, TMT (Technology, Media, Telecommunications), Retail, Natural resources, Professional services, Tourism/ leisure/ hospitality, Transport and utilities
751 telephone interviews were conducted globally
Fieldwork was conducted between 23 May & 8 July 2011
BDO Ambition Survey 2011
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KEY FINDINGSExpanding abroad: opportunities
Despite the economic and regulatory challenges facing businesses, 95% of mid-cap CFOs are confident that their 3 year plans to expand internationally will succeed
CFOs’ business plans back their confidence: on average they expect 44% of revenue in 3 years’ time to come from international sources (up from 37% now)
CFOs say they have no problem getting money to expand abroad, but finding the right people - skilled, trustworthy and cross-cultural - is a real challenge
CFOs see China as having 3 times the business opportunity of Brazil, the UK or France. However, China is a gamble as it has the most reward and the most risk factors of any country
China, USA and Germany are the top 3 global investment destinations and sources
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KEY FINDINGS CONTINUTEDExpanding abroad: making it happen
The best sources of advice for CFOs on how to expand come from close to home - internal sources and trusted customers, along with accountants and tax advisers who understand their clients’ businesses
CFOs are in a hurry to expand - they expect to open an office within a year of making a decision, which means that aligning customers, staff, partners, distributors, advisers and bankers is critical
Most businesses act fast once a decision to open a new office is made
Internal sources and existing customers are the most trusted sources when expanding
For external advice, accountants/ tax advisers are the most trusted professionals
Most businesses will expand in their core sector, with existing products and services
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KEY FINDINGS CONTINUTEDExpanding abroad: good advice
Key insights from CFOs: be prepared and invest in the right people
Do thorough research to improve your knowledge of the market
Recruitment of good staff is key to success
Find good partners in the region
Have a strong business plan
Make sure you understand the culture and language
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BUSINESS OPPORTUNITIES AND CHALLENGES
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Client name - Event - Presentation title

CONDUCTING BUSINESS ABROAD HAS BECOME MORE DIFFICULT IN THE LAST 3 YEARS
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Much more difficult

HIGH CFO CONFIDENCE IN COMPANY’S OVERSEAS EXPANSION
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Much more difficult

COMPANIES IN ALL COUNTRIES SURVEYED EXPECT MORE FUTURE REVENUE TO COME FROM ABROAD
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Much more difficult

MOST COMPANIES ARE LOOKING TO EXPAND IN CORE SECTOR
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Much more difficult

MARKET SIZE AND GROWTH OPPORTUNITIES DRIVE INTERNATIONAL EXPANSION
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Much more difficult

COMPANIES NAVIGATE A RANGE OF CHALLENGES IN INTERNATIONAL EXPANSION
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Much more difficult

THE BIGGEST CHALLENGES RELATE TO RED TAPE AND FINDING THE RIGHT PEOPLE
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Red tape is a particular challenge to French and Russian companies, Retailers, and businesses expanding with new products & services
Local people- Japanese businesses, Prof services/ Transport & utilities, and those expanding In India
Currency- Chinese/ Brazilian/ German businesses, and those expanding in US/ Canada
Competition- Chinese, German and French businesses, Retailers, businesses expanding with new products & services , and those expanding into Europe
Culture/ language- Chinese/ Japanese/ Australian/ French businesses, and businesses looking to expand in India/ Brazil
Much more difficult

INVESTMENT IN PEOPLE WILL BE A MAIN FOCUS OVER THE NEXT THREE YEARS
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People are a particular focus in all European countries, Australia, and Professional Services businesses
Channels of distribution - German/ Brazilian/ Russian/ Chinese companies, Manufacturers and businesses expanding into Russia
Product development - Brazilian & Chinese businesses, Manufacturers and businesses expanding into Western Europe/ US/ Russia
Capital - UK/ Saudi, Real Estate and Natural Resources companies
Brand & marketing - Companies from all BRIC countries + Japan, Financial services businesses and Manufacturers
Acquisitions’ North American, German, French, and Australian companies
Much more difficult

INTERNAL SOURCES AND EXISTING CONTACTS ARE THE MOST TRUSTED SOURCES OF ADVISE
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European businesses are more likely to turn to internal sources (58%)
German (62%), Chinese (53%) and Russian businesses (50%) put more trust in clients/ existing contacts
Accountants/ tax advisers are most widely used in the UK/ Netherlands (52%), Australia (50%) and USA (46%)
Australians and North Americans are more likely to turn to law firms (52% and 41%)
German and Chinese businesses are far more likely to turn to trade organisations, etc (42%/ 33%)
Chinese businesses are by far the most likely to turn to Government agencies (42%)
Brazilian businesses show the greatest trust in market research (44%)
Much more difficult

GAINING FUNDING FOR INTERNATIONAL EXPANSION IS NOT GENERALLY A COMMON PROBLEM
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Difficulty gaining funding?
Much more difficult

LOCAL KNOWLEDGE AND PEOPLE ISSUES ARE KEY WHEN EXPANDING INTERNATIONALLY
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BDO GLOBAL MARKET OPPORTUNITY INDEX
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GLOBAL MARKET OPPORTUNITY INDEXExplanation
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BDO GLOBAL MARKET OPPORTUNITY INDEX
The index was created from CFOs’ stated intentions to expand in specific countries. The arithmetic mean of 100 is based around intention to expand to all 18 countries listed

PROCESS
CFOs’ stated intentions to expand into specific countries were based on the frequency of CFO mentions of expanding into a country, and the priority order of the country being mentioned, up to a third mention
We correlated the ‘Specific countries that will be a focus for general expansion in the next three years’ against a pre-determined list of nineteen opportunity factors and sixteen challenge factors
The 6 most important factors driving opportunity for expansion were: market size, ease of entry, people and culture, market potential, acquisition opportunities, and better opportunities abroad than at home


GLOBAL MARKET OPPORTUNITY INDEXExplanation continued
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The 5 top challenge factors were: geo-political risks, finding the right local people, in-market competition, red tape and corruption, and having money and resources to expand. This enabled us to determine which countries offer the greatest opportunities in the foreseeable future
Overall Opportunity Index is based on intention to expand internationally in three years’ time and the number of CFO mentions of a given country being expanded into

CFOS SEE CHINA AS OFFERING THE GREATEST EXPANSION OPPORTUNITY: USA IS A CLOSE SECOND
CFOs see China as having THREE times the business opportunity of UK, Brazil or France
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OPPORTUNITIES AND CHALLENGES DRIVING EXPANSION
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CONTACT:International Executive Office, Brussels, BelgiumTel: +32 2 778 01 30 © Brussels Worldwide Services BVBA, September 2011
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BDO Ambition Survey 2011 - Global opportunities

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BDO Ambition Survey 2011 - Global opportunities — Presentation Transcript