@Risk

Many companies are focused on emerging markets to fuel growth. But in order to achieve success, these companies typically must clear numerous –and sometimes daunting –hurdles.

For example, Deloitte recently surveyed business leaders from companies expanding into developing economies. They said their primary challenges to increasing revenues in emerging markets are:

• providing products and services at affordable prices that meet customer needs (43 percent)
• competition from local businesses (40 percent)
• brand awareness in the market (40 percent)
• navigating protectionist policies and government bureaucracy (39 percent)

Clearly, each individual business situation is different, and so each company that eyes expansion into emerging markets must carefully weigh options and design strategies around the special requirements of each country’s consumer and regulatory environments.

The Deloitte study found companies with successful emerging markets operations implement certain strategies to generate revenue. They: (more…)

For anyone raising children, the last few weeks of summer are typically peppered with shopping trips for back-to-school supplies.  It’s a key season for retailers, typically second only to holiday shopping in December.

This year is proving to be no exception. Despite concerns about the volatile economy, a recent study by Deloitte found that nearly nine out of 10 consumers plan to maintain or increase their back-to-school spending. More specifically:

• 86 percent of the households surveyed expect to spend the same or more on back-to-school items this year.
• Even so, consumers said they will be vigilant about the cost of the items they plan to purchase. Three out of 10 (29 percent) consumers believe prices on new back-to-school merchandise are higher than a year ago, and nearly two-thirds (65 percent) said low prices are the most important retailer attribute for back-to-school shopping.
• More than half (55 percent) of those polled reported that they will buy only what the family needs, and more than one-quarter (26 percent) will reuse last year’s items due to concerns about the economy or their finances. Nearly three out of 10 (28 percent) will consolidate trips to save on gas.

Which inflation-related concerns could derail consumer spending this season? Seven out of 10 respondents cited higher food prices (72 percent) and higher energy prices (70 percent), followed by roughly half (51 percent) who pointed to the lack of improvement in the job market.

“Retailers need to be prepared for a consumer who is sensitive to prices, especially with the pinch households are feeling from higher gas and energy costs this summer,” said Alison Paul, vice chairman, Deloitte LLP and Deloitte’s retail & distribution sector leader. “Retailers should monitor customers’ reactions closely to recognize where they are flexible, and where promotions are necessary to drive traffic and generate purchases of higher margin products in the store.”

Deloitte also probed evolving consumer buying behaviors. The survey found that shoppers increasingly rely on mobile devices and social networks for brand information, discounts, etc. For example: (more…)

Are CFOs waving a cautionary flag?

As I see it, companies remain focused on growth. But, a new Q2 study from Deloitte indicates that CFOs are still concerned about economic recovery while becoming increasingly worried about both external and internal factors that threaten their progress.

The CFO Signals survey found that:
(more…)

New lease accounting standards proposed by the Financial Accounting Standards Board (FASB) may be finalized as early as June 2011, and yet a recent survey by Deloitte found that only 7 percent of executives believe their companies are extremely or very prepared to comply with the changes.

According to Deloitte, the new standards require that lessees (and possibly lessors) fundamentally change how they account for real estate and equipment leasing transactions, providing more extensive financial statement disclosures than ever before. For example, the new standards would effectively eliminate all operating leases and require them to be capitalized. For lessees, it would also replace rent payment expense reporting with interest and amortization expense reporting.

Companies that lease commercial property say they are going to feel the impact on their balance sheets. (more…)

Concerns about foreign corporate corruption, bribery and other compliance and integrity-related issues are causing businesses to re-think or even terminate deals with potential (and existing) business partners.

Mitigating risks like these has become a top priority, and new results from Deloitte’s annual Look Before You Leap survey show that: (more…)