• Mid-sized companies are investing for growth overseas but are more cautious and focused
• CFOs are focusing on BRICs; Southern Europe is seen to be risky as the politically unstable countries of the Middle East
• China leads the BDO Global Opportunity Index for the third year
• Local people, knowledge and on-the-ground execution make investments successful
BDO’s annual survey of over 1,000 CFOs from medium sized companies currently planning foreign investment has revealed that CFOs are still going for international expansion in order to drive revenues. However they are more cautious and more focused about where they choose to invest.
This year, currency fluctuations and geopolitical risks have replaced red tape and bureaucracy as the top threats to successful foreign expansion. These worries have moved CFOs to focus investment in markets that are perceived to be safer investment bets.
As a result there is a boom in the BRICs - 45% of CFOs interviewed are focusing their expansion plans on the BRICs, compared to 29% in 2011. BRICs can no longer be termed ‘emerging’ markets. They are now seen to be preferred -and known- investment entities.
In contrast to the BRICs, CFOs see Southern Europe as being as risky for investment as the politically unstable countries in the Middle East.
Once businesses have moved into a market, they generally don’t pull out. Having a deep local knowledge and the best people and distribution on the ground is a primary success factor.
More than two thirds of CFOs see customer service delivery as crucial for international growth, with Brazilian, British and South African companies ranking this most highly.
When turning to others for advice, CFOs reported that accountants and tax advisers are their most trusted sources of advice in relationship to international expansion.