Half of mid-sized firms mulling global expansion don’t know if they are ready, says survey
Global opportunities abound for companies that expand outside North America: 90 per cent of responding Canadian companies that have expanded claim success
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MONTREAL—One in four mid-sized companies considering expanding to other countries don’t even know where to start, according to a new study conducted by marketing and data company Aimia Inc.
Amia launched 100 Global Champions: Supporting International Success for Mid-sized Canadian Companies, a study that explores the challenges and opportunities facing businesses looking to expand outside of North America.
The study looked at nearly 350 companies headquartered in Canada with a minimum of 50 employees that were either considering global expansion, had already expanded, or were not considering expansion.
The research reveals that for those considering, one in four (24 per cent) don’t even know where to start.
These companies face additional challenges, such as not having the insights to identify markets for expansion (46 per cent), and not knowing the steps required to take their business overseas (63 per cent). Furthermore, half (51 per cent) don’t know if their company is ready.
But the opportunities abound: 90 per cent of responding Canadian companies that have expanded globally claim they were successful.
“As a global company with Canadian roots, our goal is to inspire and support the next generation of global leaders—100 global champions—companies that are the very best in the world at what they do,” said Rupert Duchesne, Group Chief Executive. “Through our research, we’ve seen that global companies have an expanded range of clients, access to new partners, insulate themselves from economic slowdowns in Canada, and cite higher returns on investment.”
While global companies report substantive benefits, six out of 10 businesses not currently considering expansion do not see an advantage of going global. Furthermore, 74 per cent of companies in this group have no long-term desire to expand beyond North America, and 80 per cent say their businesses are not well suited to expansion.
What is holding Canadian business back?
The research outlines four major perceived barriers to global expansion: knowledge, talent, resources and risk.
Forty-five per cent of companies considering expansion do not have the right local insights or partners.
Additionally, even with Canada’s diverse and well-educated population, 37 per cent of those considering expansion report lacking the talent they need to succeed globally.
Other findings from the research include:
- Support services are underused – While companies are aware of the 11 Canadian support services listed, including development banks, chambers of commerce, and government agencies, few engage them for support, with service-based companies engaging them less often (13 per cent) than their goods-based counterparts (22 per cent), on average.
- Personal connections matter – Nearly a third (30 per cent) of service-based companies and 44 per cent of goods-based companies leverage their personal connections for support in going global.
- A clear opportunity to build Canada’s knowledge economy – The majority of companies considering global expansion are service-based (60 per cent), yet half (50 per cent) of service-based companies feel they don’t have adequate support and resources to make the move outside of Canada.