Summary of USA insights
Conducting business abroad has become slightly easier than 3 years ago according to US mid-cap CFOs. Despite the economic and regulatory difficulties facing all businesses, 95% of American mid-cap CFOs we interviewed are confident that their three year plans to expand internationally will succeed. On average, they expect 42% of their revenues in 2014 to come from sales outside USA, up from the current 35%.
USA businesses are focusing on expanding into China, Germany, Canada and Brazil while USA plays an integral part in the expansion plans of Chinese, German, Canadian, Dutch and UK businesses.
Market size, access to new customers and strong existing client/customer relationships are the most important opportunities for companies looking to expand into USA.
Red tape & bureaucracy, finding the right local people and intensity of local competition are the biggest challenges faced by USA companies when expanding internationally.
Over half of USA businesses act fast once a decision to open a new office is made - 51% open an office in less than a year. Nearly half of USA businesses claim that accountants/tax advisers (46%) and clients/customers (42%) are the most trusted sources when expanding abroad.
Outlook for cross border growth
- China, Germany, Canada and Brazil are important markets for USA outward expansion
- USA expansion abroad is driven by market size, access to new customers and growth opportunities
- USA 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 USA companies expanding abroad
Factors driving inward USA investment
- Market size
- Access to new customers
- Strong existing client/customer relationships
Challenges for companies expanding in USA
- Currency fluctuations
- Intensity of local competition
- Red tape & bureaucracy
Challenges faced when expanding internationally
- Red tape & bureaucracy
- Finding the right local management
- Intensity of local competition
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 (100 in USA). The survey was conducted by StrategyOne between 23 May – 8 July 2011