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BDO Ambition Survey launches today

28 October 2010

Globally ambitious businesses aspire to expand into BRIC but Europe remains the safe house for international expansion

    • A BDO study reveals that two-thirds of internationally focused 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 presents the most achievable prospects in the foreseeable future
    • Identifying the right people on the ground to grow business is crucial to making or breaking plans for international expansion

Ambitious businesses believe that European countries present more potential and fewer barriers to growth, despite almost half of them stating that BRIC is where they eventually want to be, according to a new report from BDO.

The international study which interviewed business leaders and international heads of globally aspiring mid-cap companies in 10 countries (Australia, Brazil, Canada, China, Germany, India, Netherlands, Russia, UK and USA) found that 47 per cent want to invest in BRIC markets and of those almost half (43%) say China is a particular focus. In reality, however, Europe tops the table as the region to provide the greatest opportunities for cross border growth in the next one to two years.

Jeremy Newman, CEO of BDO says, “Although business leaders aspire to expand into the BRIC countries, in reality businesses will be looking to expand into Europe in the next one to two years, perceiving there to be fewer barriers to growth and greater prospects. The results paint a picture of an expansive, outward looking business community wanting to move further afield but are held back by insufficient local knowledge of the markets that are appealing to them. The ambitious global business leaders that we spoke with advise their peers to research and know their market in depth, to try not to impose one’s own culture and to focus on developing a trusted local network by securing trustworthy partners and staff.”

The BDO Ambition Survey, conducted for the world’s fifth largest accountancy network, showed that companies are in optimistic mood, with 95 per cent of them confident about international expansion and two thirds (66%) planning to be more aggressive in their plans this year compared to last.

Respondents were surprisingly less concerned about the challenges both red tape and corruption present, but instead felt that the keys to success when expanding abroad are people related: identifying the right local management and staff (62%), and finding a trustworthy local partner (59%). 40 per cent of respondents said they look to a trusted management consultant, accountant or professional adviser for on-the-ground advice when expanding into new territories.

Researchers found that the opportunity to achieve market leader status (65%) and the ability to benefit from the size of a market’s population (77%) are key factors in successful cross-border growth.


Key statistics/findings
    • Business leaders from the BRIC countries are in the most aggressive mood for growth, while those from North America are the least aggressive
    • The Germans are the most confident in their future international expansion plans, while the Chinese and Indian leaders are the most optimistic, both for their own country and their own sector
    • China is consistently the most aspired to country for international expansion
    • The main focus of investment over the next 1-2 years is likely to be people related (26%) or related to channels of distribution (25%)
    • The single biggest factor contributing to cross-border growth is the size of market/population. The three least important factors are acquisition or merger opportunities, cheaper labour costs and tax incentives
    • The two biggest challenges when growing abroad are finding the right local management and staff and locating trustworthy local partners & suppliers
    • Brazilian businesses are particularly focusing on the Americas; Russians on Europe; Indians on EMEA and SE Asia; while Chinese companies are focusing on the widest group of countries
    • Businesses expanding into Russia, Brazil and China have met with the most success. The least successful are the UK, India, and the USA
    • The majority (69%) of international expansion is likely to be within a company’s core sector with only 15% of businesses expanding into a new product/area


About the survey

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 executive survey questioned globally aspiring companies (small to mid-cap companies US$50m to US$2bn) with international expertise.
The research was designed by StrategyOne and was conducted by way of semi-structured telephone interviews, including a mix of open and closed questions. 237 interviews were conducted across 10 countries (Australia, Brazil, Canada, China, Germany, India, Netherlands, Russia, UK and USA) with ‘C-suite’ executives, heads of international divisions and business leaders.

For more information, click here



Note to editors

BDO International Limited is a UK company limited by guarantee. It is the governing entity of the international BDO network of independent member firms (‘the BDO network’). Service provision within the BDO network is coordinated by Brussels Worldwide Services BVBA, a limited liability company incorporated in Belgium with its statutory seat in Brussels.

Each of BDO International Limited, Brussels Worldwide Services BVBA and the member firms is a separate legal entity and has no liability for another such entity’s acts or omissions. Nothing in the arrangements or rules of the BDO network shall constitute or imply an agency relationship or a partnership between BDO International Limited, Brussels Worldwide Services BVBA and/or the member firms of the BDO network.

BDO is the brand name for the BDO network and for each of the BDO member firms.

The combined fee income of all the BDO Member Firms, including the members of their exclusive alliances, was $5.03 billion in 2009. The global network has 1,138 offices in 110 countries and more than 46,000 people provide advisory services throughout the world.


Contacts
Emma Dennis
Edelman
emma.dennis@edelman.com 		Tel +44 20 3047 2076
Fax +44 20 3047 2506