Summary of Germany insights
Conducting business abroad has become more difficult than 3 years ago according to German mid-cap CFOs. Despite the economic and regulatory difficulties facing all businesses, all German mid-cap CFOs we interviewed are confident that their three year plans to expand internationally will succeed. On average, they expect 48% of their revenues in 2014 to come from sales outside Germany, up from the current 42%.
German businesses are focusing on expanding into China, USA, France, Belgium and Russia while Germany plays an integral part in the expansion plans of Chinese, Dutch, UK and French businesses.
Market size, access to new customers and strong existing client/customer relationships are the most important opportunities for companies looking to expand into Germany.
Finding the right local management, currency fluctuations and intensity of local competition are the biggest challenges faced by German companies when expanding internationally.
Most German businesses act fast once a decision to open a new office is made - 68% open an office in less than a year. Over half of German businesses claim that clients/existing contacts (62%) internal sources (54%) are the most trusted sources when expanding abroad.
Outlook for cross border growth
- China, USA, France, Belgium and Russia are important markets for German outward expansion
- German expansion abroad is driven by market size, growth opportunities and increased demand
- German businesses are more likely to ‘play it safe’, expanding in their core sector and with both new and existing products and services
- Investment in channels of distribution will be the main focus over the next 3 years for German companies expanding abroad
Factors driving inward German investment
- Market size
- Access to new customers
- Strong existing client/customer relationships
Challenges for companies expanding in Germany
- Intensity of local competition
- Finding the right local management
- Red tape & bureaucracy
Challenges faced when expanding internationally
- Finding the right local management
- Currency fluctuations
- Intensity of local competition
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 Germany). The survey was conducted by StrategyOne between 23 May – 8 July 2011