Summary of Canada insights
Conducting business abroad has become more difficult than 3 years ago according to Canadian mid-cap CFOs. Despite the economic and regulatory difficulties facing all businesses, 98% of Canadian mid-cap CFOs we interviewed are confident that their three year plans to expand internationally will succeed. On average, they expect 58% of their revenues in 2014 to come from sales outside Canada, up from the current 50%.
Canadian businesses are focusing on expanding into USA, China, Brazil, India and Mexico while Canada plays an integral part in the expansion plans of USA and Australian businesses.
Market size, access to new customers, acceptable geo-political risk and the availability of skilled personnel are the most important opportunities for companies looking to expand into Canada.
Red tape & bureaucracy, finding the right local management and regulatory interference are the biggest challenges faced by Canadian companies when expanding internationally.
Over half of Canadian businesses act fast once a decision to open a new office is made - 56% open an office in less than a year. Nearly half of Canadian businesses claim that Internal sources (44%) and law firms/lawyers (44%) are the most trusted sources when expanding abroad.
Outlook for cross border growth
- USA, China, Brazil, India and Mexico are important markets for Canadian outward expansion
- Canadian expansion abroad is driven by market size, growth opportunities and access to new customers
- Canadian businesses are more likely to ‘play it safe’, expanding in their core sector and within existing products and services
- Investment in people will be the main focus over the next 3 years for Canadian companies expanding abroad
Factors driving inward Canadian investment
- Market size
- Access to new customers
- Acceptable geo-political risk
- Availability of skilled personnel
Challenges for companies expanding in Canada
- Intensity of local competition
- Currency fluctuations
- Red tape & bureaucracy
Challenges faced when expanding internationally
- Red tape & bureaucracy
- Finding the right local management
- Regulatory interference
Top insights for growth
- Do thorough research to improve your knowledge of the market
- Find good contacts/ strong partners in the region
- Have a strong business plan
The in-country summaries are given as general commentary only. The global BDO Ambition Survey 2011 is based on 751 CFOs’ responses of mid-cap companies across 13 countries (50 in Canada). The survey was conducted by StrategyOne between 23 May – 8 July 2011