"Everyone takes the limits of his own vision for the limits of the world."
Arthur Schopenhauer, German philosopher (1788 - 1860)
In a recent report sponsored by Alix Partners, The Economist Intelligence Unit presented a distillation of research conducted in late 2011 among a number of "C-level" executives from countries with head offices based in more than 70 different countries. Uncertainty, hesitancy, caution, and concern characterize most of the feedback.
But one theme was clear. Simply hunkering down for another round of cost cutting and balance sheet strengthening as was common in '08-'09 will damage companies. Prudent management of cash reserves is important, but certain investments are generally acknowledged as important moving forward.
To stand still is to be overtaken
These executives nearly all concurred that appropriate (many argued strategically imperative) investments going forward are for product innovation and new market development. While it is consensus that all markets will experience uncertainty and perhaps even disruption during the next phase of this ongoing crisis, it is also nearly universally accepted that emerging markets will recover faster and follow a trajectory from that recovery which will make them particularly important for business growth.
The problem for most companies is that taking bold and foreign (literally and figuratively) action during a time which calls for caution feels too counterintuitive. How about you? How about your company?
Here are some excerpts from the Economist report:
[testimonial by="Economist Intelligence Unit Ltd." from="Jan 2012 Research Report on how companies view currently forseeable conditions"]
Cost control is enormously important, but, at some point, companies that don't directly invest in expanding their markets....will risk atrophy and lasting competitive disadvantage
on organic vs. acquisition expansion
As companies look abroad, it's not surprising that expanding into new markets is the top priority, followed by diversifying products and services. Acquisitions are a higher priority than equipment and facilities, suggesting that buying whole businesses that already have operations overseas looks more appealing than building an operation or buying pieces of an operation
on "Next Steps"
Expanding into emerging markets. Even as developed-market economies struggle, emerging markets are likely to keep growing and keep nurturing their rising consumer economies. In this increasingly global marketplace, companies large and small should find opportunities for both organic expansion and acquisitions...but looking at just one big market isn't thinking globally...smaller Asian countries, Latin America...worth considering for many businesses.
Are the "limits of your vision" going to jeopardize your business?
No one answers yes to this.....but if you company doesn't have strategically conceived international growth and diversification plans in place, with action steps underway, the hard truth is that the answer is "YES"!
Dont "play dead"!
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