CFOs Are Confident About Global Expansion Plans

Even though the current economic climate is less than rosy, the 750 CFOs surveyed in BDO's annual Global Ambition Survey, say they are optimistic about cross-border growth.

A whopping 95 percent of those polled reported they are in a confident mood about their global expansion plans. (Although more than three-quarters (78 percent) concede that the challenges when expanding abroad are greater than those associated with growth at home.)

And, surprisingly, there appears to be little concern about access to credit. More than two-thirds (69 percent) said have no difficulty in gaining funding for expansion.

What does pose a challenge for expansion plans? Finding local people with the right skills and knowledge. More than half (52 percent) of all respondents put finding the right people in their top three areas of focus for international investment. Among those struggling to find the right people, a lack of specialist skills (44 percent) and reliability of staff (33 percent) are key challenges.

In addition, survey respondents cited other challenges, including the intensity of local competition, red tape and bureaucracy. As you might expect, concerns about red tape and bureaucracy remain significant for those targeting the BRIC markets: Brazil 58 percent, Russia 57 percent, China 50 percent and India 43 percent.

In other key findings:


The research revealed three top opportunity factors: market size, access to new customers and higher growth rates, and there was a strong link between size of potential market and proportion of future revenues. 60 percent say market size is of particular interest to their company's expansion plans. Market size is particularly applicable for companies expanding to the USA (76 percent) and China (75 percent).


Higher growth rates drive interest in China (64 percent) and Brazil/India (62 percent each).


Cheaper labor rates are particularly applicable to companies expanding in India (43 percent), China (40 percent) and Brazil (29 percent).


More than one-fifth (22 percent) of Chinese CFOs say Germany is a particular focus for expansion, second only to the USA (33 percent).


As BDO explains in a press release, the Global Ambition Survey is part of the company's ongoing program to identify the challenges facing mid-cap companies as they seek to expand. The network itself has made significant progress in China in recent years: revenues increased by 64 percent in the year 2009 to 2010 and personnel numbers have grown four-fold over a four year period.