Wells Fargo: Mid-Sized Companies Focus Internationally
According to a new survey released from Wells Fargo’s International Group, the global marketplace is no longer the exclusive domain of large corporations as mid-sized U.S. companies focus on doing business internationally in order to be financially successful.
Among 250 U.S. companies with $50 million or more in annual revenue, 69% of mid-sized companies plan to increase international business over the next year – and more than half expect an increase in revenue and profits from their international activity.
The Wells Fargo International Business Indicator was launched to track the outlook and activity of companies that conduct at least some international business.
“U.S. companies are bullish on international business,” said Sanjiv Sanghvi, head of Wells Fargo’s Global Banking Group. “They view international markets as growth opportunities for their products, services and supply chains. The results of our inaugural International Business Indicator provide insights into the ‘why, how and where’ of the international strategies for these U.S. companies.”
In the face of a tough competitive environment and current economic conditions, companies are looking outside the U.S. to grow their businesses. Seventy nine percent of companies said a competitive marketplace is driving their international plans, with 77 percent citing global economic conditions, and 73 percent saying labor costs. While companies continue to expand their international activity, companies said they are concerned that political stability and regulations – both at home and abroad – may negatively impact their international business.
When developing their international strategy, companies can turn to a number of different sources for information. The most valued source, by a wide margin, is feedback from customers and suppliers, which was cited by 55% of companies. Fewer than half as many look to government agencies (20%) or industry and trade resources (17%) to help with decisions about international business.
Companies looking to expand internationally say they are more focused on U.S. neighbors, with Latin America and Canada leading the list of regions where they plan to increase business activity. Fifty-six percent of companies plan to increase activity in Latin America (including Mexico) followed by 49% in Canada and 48% in Asia Pacific (excluding China). U.S. businesses are also planning to increase activity in China (41%) and Western Europe (35%) while they are currently less focused on Middle East and Africa (28%) and Central and Eastern Europe (23%).