@Risk

Pursuing deals in growth markets can be tremendously beneficial.  But, doing business in growth markets is inherently more risky, too.

What can your company do to take advantage of the benefits (low cost manufacturing, access to natural resources, market access for basic global products, buyers with access to core operations, etc.), while mitigating potential pitfalls?

For starters, you may want to read PwC’s new study, Getting on the Right Side of the Delta: A Deal-maker’s Guide to Growth Economies. After analyzing 200 deals (both publicly announced and private ones for which PwC was an advisor) and interviewing 20 leading dealmakers around the world, PwC found that:

• The majority of deal risks typically relate to one or more of three key elements: the asset itself, the seller, or the government.
• The most common barrier to deal completion is an inability to get comfortable with valuations. 40 percent of failed deals in PwC’s data set fell victim to valuation concerns.
• The most common problems that emerge after a deal closes concern partnering, causing 30 percent of problems post-deal.  Beyond partnering, the same issues that prevent deals from closing also frequently emerge post-deal (direct government interference, problems with financial information and non-compliant business practices).

Fortunately, PwC’s report also includes five key recommendations for dealmakers when pursuing deals in growth markets. PwC advises dealmakers to: (more…)

Analysts are forecasting continued global economic volatility in 2012, so it makes sense for forward-thinking companies to bolster their focus on improved efficiencies and the mitigation of supply chain risks.

Recent research from IDC Manufacturing Insights confirmed that many Asia/Pacific manufacturers are doing just that. Drilling down even further, the IDC Manufacturing Insights report, Asia/Pacific Manufacturing 2012 Top 10 Predictions, concludes that in 2012 there will be greater use of predictive analytics tools among the region’s manufacturers.

Why? Because countering supply chain risks now requires better decisions at strategic and tactical levels –the kind of decisions made possible by predictive analytics, automation and enhanced supplier collaboration.

Noting that countries in the West are battling sluggish economies and high unemployment rates, IDC Manufacturing Insights also predicts that Asia/Pacific manufacturers will focus on producing goods where there is demand and growth – domestically, in the Asia/Pacific region. (more…)

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…)

In a global economy where companies are setting their sights on even more international expansion, it’s quickly becoming essential for businesses to communicate in foreign languages.

But, does the US workforce have the skills necessary to meet this kind of challenge?

Language Study: Reducing the Impact of Language Barriers, a new study from Forbes Insights, offers some perspective.

For the research, Forbes Insights surveyed more than 100 executives at large US businesses (all had annual revenues of more than $500 million). Among the key findings: (more…)

More new research indicates that global companies are setting their sights on growth and global expansion.

As I pointed out last week, nearly all (95 percent) of the CFOs polled in BDO’s annual Global Ambition Survey said they are optimistic about their global expansion plans.

Now, a new report from KPMG concludes that global manufacturers have made top-line growth their number one priority in the next two years, despite persistent economic volatility and uncertain demand.

KPMG surveyed 220 manufacturing executives from global companies with at least $1 billion in revenue and found that: (more…)