CFOs forge on ahead with global expansion
Organisations and CFOs across the globe are shaking off the effects of COVID-19 and forging a path to new or expanded international operations, according to new research from Globalization Partners and CFO Research.
Of the 166 senior finance executive respondents with international expansion plans, 71% pointed to North America as their next likely market, followed by the Asia Pacific region – excluding China (65%).
While almost half (45%) say they are expanding globally or plan to do so within the next year, 9% say they will wait another year.
Respondents expect that expansion will be a long process - 86% say their global expansion took or would take at least five months. That figure includes 42% who put the time required at more than one year. As a result, dedicating resources to global operations was also a top concern for executives planning international expansion.
Respondents see opportunities in capturing market share, sales expansion, investment diversification, and acquiring top talent. Additionally, 83% of respondent say they are looking into a remote, global workforce model.
Global expansion does come with concerns, however. Employee health and safety was named the top concern, cited nearly twice as much as other issues such as new business strategies, increasing sales pipeline and revenue, and reducing organizational costs.
In addition, 83% of executives are concerned about managing multiple third parties and stakeholders in a foreign environment during a volatile economic climate. Seventy-four percent (74%) of executives expressed concern with navigating foreign banks and international employee payroll in volatile times.
“This research offers grounds for optimism that the economic crisis caused by COVID-19 has not derailed international expansion plans for most businesses who were already on this path,” says Globalization Partners CEO and founder Nicole Sahin.
“The operational challenges, particularly around local legal rules, recruitment and compliance can take months to navigate. Our solution removes these barriers to success and makes it easy to establish new international teams and revenue generation in a matter of days.
Sahin says that the survey underlines key challenges that companies will face as they undergo global expansion.
“The biggest issue for most of our clients is the time and cost involved with establishing legal entities or subsidiaries. We make it easy for our clients to hire talent in a new country in a matter of days while ensuring compliance with international laws and agreements,” Sahin concludes.
The survey was conducted by CFO Research of Argyle Advisory and Research Services.