Summary of UK insights
Conducting business abroad has become more difficult than 3 years ago according to UK mid-cap CFOs. Despite the economic and regulatory difficulties facing all businesses, 96% of UK mid-cap CFOs we interviewed are confident that their three year plans to expand internationally will succeed. On average, they expect 46% of their revenues in 2014 to come from sales outside the UK, up from the current 40%.
UK businesses are focusing on expanding into USA, Germany, China, Brazil and Russia while the UK plays an integral part in the expansion plans of European, USA and Indian businesses.
Market size, access to new customers and strong existing client/customer relationships are the most important opportunities for companies looking to expand into the UK.
Red tape & bureaucracy, finding the right local management and regulatory interference are the biggest challenges faced by UK companies when expanding internationally.
Most UK businesses act fast once a decision to open a new office is made - 70% open an office in less than a year. Over half of UK businesses claim that Internal sources (56%) and accountants/tax advisers (52%) are the most trusted sources when expanding abroad.
Outlook for cross border growth
- USA, Germany, China, Brazil and Russia are important markets for UK outward expansion
- UK expansion abroad is driven by market size and growth opportunities
- UK 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 UK companies expanding abroad
Factors driving inward UK investment
- Market size
- Access to new customers
- Strong existing client/customer relationships
Challenges for companies expanding in the UK
- 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
- Recruitment of good staff is key to success
- Find good contacts/ strong partners in the region
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 UK). The survey was conducted by StrategyOne between 23 May – 8 July 2011