BDO set out to understand what leaders of globally ambitious businesses perceived as the biggest constraints to growth and find out what they would want to share with others considering their first steps overseas – as well as where they themselves were prioritising their next moves.
The key findings were:
- The BDO study reveals that two-thirds of the most ambitious mid-caps have more aggressive expansion
- These business leaders target the BRIC markets when thinking of expansion, but Europe presents the most achievable prospects
- The single biggest factor for successful international expansion is identifying the right people on the ground
For more information on the BDO Ambition Survey 2010 see: http://www.bdointernational.com/ambitionsurvey
2. INTRODUCTION
The 2010 BDO AMBITION SURVEY: GLOBAL
OPPORTUNITIES assesses the advantages and disadvantages
of expanding into different territories, based on the
experience of those who have already been there.
The focus of the study was on identifying the strategies,
critical success factors and challenges to cross-border
growth encountered by those companies experienced in
cross-border expansion.
It explored themes around how globally ambitious midsized
companies can maximise the business opportunities and
navigate the regulatory challenges of cross-border growth.
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3. KEY FINDINGS
Two-thirds of the most ambitious mid-caps have more
aggressive expansion plans than last year and 95 per cent
are confident about international cross-border growth
These business leaders target the BRIC markets when
thinking of expansion, but Europe and the USA present the
most achievable prospects in the foreseeable future
The single biggest factor for successful international
expansion is identifying the right people on the ground to
grow the business
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4. MOOD & CONFIDENCE
Globally aspiring ‘mid-cap’ companies are in expansive mood and are very confident in their company’s
future plans for international expansion
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5. INVESTMENT OPTIMISM
Most companies (85%) are optimistic about the growth prospects for their resident country and a similar
proportion (87%) are confident with respect to their own sector.
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6. PRIORITY REGIONS FOR EXPANSION
Over the last five years, China has been the most important target market for expansion, and as an
aspiration this position looks set to continue, at least for the next one to two years
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7. SUCCESSFUL EXPANSION
Past experiences of international expansion have generally been positive, particularly in the BRIC markets.
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“China was very successful for two reasons. They
offered improvements on existing services and
developed a new distribution centre for web
advertising. Thereafter it has mainly been the case
of natural growth. They have also been able to hire
very talented people.” Vice President & Executive
Director, Canada
“India and Russia are more difficult because their
commercial regulations and game rules are very
different from Chinese culture. The local legal
system, for example: the legal System of Russia is
not well established and the policy is not
transparent. I think Britain, Australia and South
Africa have been quite successful as they have clear
market entry regulations and sales channels are
clear. In some countries the sales systems are
chaotic. In countries with well established sales
systems like Britain and Australia, contractors know
where to buy products.” Vice President, China
“The least successful is the UK. The reason is the
stagnant point of view of the regulating
governmental body.” Vice President of International
Development, Russia
8. GROWTH FACTORS
When expanding internationally,
the main opportunities are to
increase demand for one’s own
product and to take advantage of
economic growth rates and
increasing wealth
The most important factors
contributing to cross border
growth can broadly be categorised
as economic factors and factors
relating to infrastructure and
business environment
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9. GROWTH CHALLENGES
The major barriers and challenges can be broadly categorised as ‘people’ and ‘geo-political factors’
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10. EXPERT ADVICE
Businesses were asked for their top tips for growing internationally, based on their experiences so far. By
far the most mentions refer to making the effort to understand the market being prioritised for cross
border growth - its people, its culture, its politics, and its language. ‘People factors’ dominated
the responses
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1. Research/ understand market/ risks in depth: 27%
2. Don’t try to impose your own culture: 17%
3. Develop local network/ contacts/ relationships: 16%
4. Get the right people/ use skilled people: 9%
5. Meet people/ face-to-face/ spend time on the ground: 8%
6. Strong/ right management: 7%
7. Ensure right business structure/ plan: 5%
8. Don’t underestimate time and effort required: 5%
9. Use local staff/ invest in local people: 5%
10. Ensure sufficient financial resources: 5%
11. THANK YOU
To download the full report and read the research methodology, please visit:
www.bdointernational.com/ambitionsurvey
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