Half of American Private Firms Plan to Do Business Overseas Within Next 1 to 2 Years
9/19/2011
According to PwC's newest Private Company Trendsetter Barometer, most firms expanding internationally do so to broaden their customer base(80 percent), better serve global clients (43 percent), make up for slow growth in the U.S. (33 percent), want to be where competitors are (26 percent), or want to lower operating costs (24 percent).
The PwC survey captures the views of 236 CEO/CFOs (128 in the product sector, 108 in the service sector) with private companies averaging $278 million in enterprise revenue/sales; and includes giant $300 million-plus firms.
"Historically, companies expanded into international markets to lower their manufacturing and sourcing costs," said Ken Esch, a partner in PwC's Private Company Services practice. "The international expansion we're seeing now is well beyond cost arbitrage. It's about increasing sales and accessing new markets to grow the top line. To achieve those goals, many of our clients are looking abroad, compensating for weakened demand at home."
In general, 74 percent of the companies with a global presence are focused on emerging and fast-growing markets.
Canada, Western Europe and Mexico are the top three markets where these firms have a current or planned presence. About half of these globally active companies plan to, or have targeted, Brazil, Russia, India and China. Two-thirds (66 percent ) of private businesses operating abroad are exploring other fast-growing markets such as Indonesia, South Korea, South Africa, Poland and Turkey (Mexico also is found in this category of "other fast-growing" markets).
Another finding: Surveyed executives also estimate that during this one to two-year timeframe, international sales growth (14.8 percent) will outpace growth from domestic sales (11.6 percent).
The challenges to these expansion plans can be formidable, but not impossible to overcome. The top ones cited by internationally active respondents were: finding the right business partners (68 percent), establishing adequate cross-cultural management (64 percent), and finding sufficient local talent (56 percent).
Other challenges noted included security risks (49 percent), local regulatory requirements (48 percent) and corruption (46 percent). These challenges notably higher by firms doing business in Brazil, Russia, India and China.
Project Announcements
Lufthansa Technik Expands Tulsa, Oklahoma, Operations
02/10/2025
AGS America Expands Opelika, Alabama, Manufacturing Operations
02/10/2025
Italy-Based Serioplast Plans Shenandoah County, Virginia, Operations
02/09/2025
Flash Steelworks Expands St. Clair County, Michigan, Operations
02/09/2025
Coast Packing Company Establishes Amarillo, Texas, Operations
02/09/2025
CC Patio Establishes Phoenix, Arizona, Manufacturing Operations
02/09/2025
Most Read
-
2024's Leading Metro Locations: U.S. Cities on the Rise Amid an Economic Reshuffling
Q4 2024
-
The Workforce Factor: How States Are Competing to Build Tomorrow's Talent
Q4 2024
-
Best Practices in Incentives Procurement
Q4 2024
-
NEW NIMBYism: A Threat to The U.S. Economy
Q4 2024
-
Five Strategies to Tackle the Data Center Talent Shortage
Q4 2024
-
Microsoft-Three Mile Island Deal Could Signal Path for Nuclear Power to Strengthen Partnerships with Big Tech
Q4 2024
-
Industries Look for Employees in Nontraditional Spaces Amid Labor Shortage
Q4 2024