resilient growth final
TRANSCRIPT
8/3/2019 Resilient Growth Final
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8/3/2019 Resilient Growth Final
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PwC Resilient growth: Making the most of opportunities away from home 3
As emerging-market growth continues to outstrip!"#!$%&$#'(#)*+'$+*%)%,-+.$,-/+'$-)$0.*#1$#)'$debt crises, it is not surprising that an increasingnumber of companies are refocusing their growthstrategies on those fast-growing markets. With 2%3!"&31$4%431#!-%).5$/-.-)6$4+/$*#4-!#$-)*%,+.$#)'$%&!+)$"+#1!"2$4371-*$0)#)*+.5$+,+/6-)6$,#/8+!.$have moved centre stage for both intercorporate#.$9+11$#.$-)!+/6%(+/),+)!#1$*%,4+!-!-%)$&%/$-)(+.!,+)!:$;"-1+$,#)2$<=>.$)#!3/#112$6/#(-!#!+$toward the prospect of opportunity, their optimism#7%3!$+,+/6-)6?,#/8+!$4%!+)!-#1$)++'.$!%$7+$,%'+/#!+'$72$"+#1!"2$/+#1-.,$#)'$.%3)'$.!/#!+6-*$41#))-)6$#)'$+@+*3!-%):$
Despite sustained higher growth rates-)$+,+/6-)6$,#/8+!.5$,#)2$<=>.$#/+$.!-11$*#3!-%3.$#7%3!$(+)!3/-)6$&%/!":$ A.$#$/+.31!5$0/.!?,%(+/$#'(#)!#6+.$ in some of these markets are being+)B%2+'$72$,31!-)#!-%)#1.$&/%,$%!"+/$emerging-market countries, most)%!#712$<"-)#5$C/#D-1$#)'$E)'-#:$F/#'+$among emerging-market countries
#**%3)!.$&%/$GHI$%&$!%!#1$61%7#1$!/#'+$today, and a third of foreign directinvestment into emerging-marketcountries now originates from+,+/6-)6?,#/8+!?'%,-*-1+'$0/,.:$
C3!$31!-,#!+125$&%/$#)2$*%,4#)25$entering or growing in these markets'+,#)'.$#$*1+#/$3)'+/.!#)'-)6$%&$!"+$"3/'1+.$!%$+.!#71-."-)6$%/$+@4#)'-)6$#$4/+.+)*+$-)$#)$3)&#,-1-#/$,#/8+!5$ working with partners in an uncertain
%44%/!3)-!-+.$-)$3)&#,-1-#/$,#/8+!.5$#1%)6$!"/++$.!#6+.J
1. entering a market
2. maintaining a presence
K:$'+*-'-)6$!%$+@-!$#$,#/8+!
E!$#1.%$*%).-'+/.$!"+$4#/!-*31#/$)++'$ !%$73-1'$#$/+.-1-+)!$61%7#1$.34412$*"#-):$=#*"$.+*!-%)$%&&+/.$#$*%)*-.+$!%%18-!$%&$L3+.!-%).$!%$9"-*"$<=>.$)++'$#).9+/.$!%$#..+..$6/%9!"$4/%.4+*!.$/+#1-.!-*#112$#)'$."#4+$.!/#!+6-+.$#**%/'-)612:$A.$uncertainty continues about the state of ,#B%/$#'(#)*+'$+*%)%,-+.5$!"+$#44+#1$%&$"-6"?6/%9!"$,#/8+!.$/-.+.:$C3!5$however strong its current growth rate,)%$*%3)!/2$-.$-,,3)+$&/%,$!"+$-11.$%&$!"+$61%7#1$+*%)%,2:$A$/-6%/%3.$approach to assessing and monitoring7%!"$%44%/!3)-!-+.$#)'$/-.8.$-.$+..+)!-#1$!%$.3**+..$-)$3)&#,-1-#/$,#/8+!.:
Figure 1: Emerging economies will grow faster than developed economies
F o r e c a s t a v e r a g e a n n u a l G D P g r o w t h , 2
0 1 2
Italy
Spain
France
Germany
United Kingdom
Canada
United States
Japan
Central & Eastern Europe
Brazil
Mexico
Middle East & North Africa
Russia
Argentina
ASEAN-5*
Sub-Saharan Africa
India
China 9.5
7.8
5.9
5.7
4.6
4.5
4.4
4.0
3.6
3.2
2.9
2.7
2.6
2.3
2.0
1.9
1.6
1.3
%
Developing Developed
*Indonesia, Malaysia, Philippines, Thailand and Vietnam.
Note: Select economies shown, using IMF designations.
Source: IMF, World Economic Outlook , 2012 projections, 16 June 2011
Contents Introduction
Introduction ................... 2
Section 1 A two-speedeconomy sets the stage ..........5
Section 2 Global growth strategies: factoring in greater
operational complexity
and risk ............................ 9
Risk monitoring for different
stages of market participation
Market entry ......................11
Market presence ..................14
Market e xit .........................19
Supply chains .....................20
Section 3 Balancing
opportunities and risks ....... 23
Contacts and
contributors.................. 27
environment, sustaining constructive6%(+/),+)!$/+1#!-%).$#)'$,%)-!%/-)6$#$,%/+$*%,41+@$.34412$*"#-)$)+!9%/8:$F"+$4#/!-*31#/.$%&$+#*"$,#/8+!$/+L3-/+$more rigorous attention to changeto determine approaches to bothopportunity and risk.
F"+/+$-.$)%$/+*-4+M$)%$!9%$+,+/6-)6$
,#/8+!.$#/+$!"+$.#,+:$;"-1+$%)+$,#2$be attractive to a South American#6/-&%%'$*%,4#)25$&%/$+@#,41+5$-!$,#2$"%1'$1-!!1+$4/%,-.+$&%/$#$=3/%4+#)$/+!#-1+/:$<%3)!/2$6/%9!"$/#!+.$#1%)+$'%)N!$!+11$!"+$9"%1+$.!%/2:$A*"-+(-)6$6/%9!"$-)$3)&#,-1-#/$,#/8+!.$'+,#)'.$#$,%/+$'+1-7+/#!+$#1-6),+)!$of risk monitoring with both strategic41#))-)6$#)'$%4+/#!-%)#1$+@+*3!-%)$!"#)$+(+/$7+&%/+:$F"-.$/+4%/!$'-.*3..+.$how companies can weigh the array of /-.8.$!"#!$6%$#1%)6$9-!"$!+,4!-)6$
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PwC Resilient growth: Making the most of opportunities away from home 5
Section 1 A two-speed economy sets the stage
Figure 2: CEOs are confident about growth over the next 12 months
Q: How confident do you feel in prospects for the revenue growth of your company over the next 12 months?
Very confident
Somewhat confident
Not very confident
Not confident at all
Don’t know/uncertain
42
38
15
4
1
%
Base: All respondents (201).
Source: PwC Pulse Survey of the International CEO Panel of PwC’s Annual Global CEO Survey, 26 July 2011
OA)2$-)'3.!/-#1$*%,4#)2$P$-&$-!N.$6%-)6$!%$7+$#$61%7#1$1+#'+/$P$
"#.$!%$"#(+$#$1#/6+$4/+.+)*+$-)$+,+/6-)6$,#/8+!.5Q$.#-'$='9#/'$R:$C/++)5$<"#-/,#)$#)'$<=>$%&$F2*%$E)!+/)#!-%)#15$7#.+'$-)$
S9-!D+/1#)'5$.3,,-)6$34$!"+$,%%'$%&$/+.4%)'+)!.$!%$!"+$
PwC 14th Annual Global CEO Survey. “Fifteen percent of our
revenue right now is coming from emerging markets and 9+N/+$1%%8-)6$!%$'%371+$!"#!$-)$!"+$)%!?!%%?'-.!#)!$&3!3/+:$E!N.$
#)$%44%/!3)-!2$!"#!$2%3$"#(+$!%$!#8+$(+/2$.+/-%3.12:Q
E)$#$/+*+)!$T31.+$.3/(+2$%&$!"+$-)!+/)#!-%)#1$<=>$4#)+1$!"#!$*%)!/-73!+.$!%$T9<N.$ Annual GlobalCEO Survey,$GUI$%&$!"+$UVW$<=>.$surveyed said they were “very *%)0'+)!Q$#7%3!$!"+-/$*%,4#)-+.N$growth prospects in the coming year, with the number rising to 54%/+412-)6$O(+/2$*%)0'+)!Q$#7%3!$
6/%9!"$4/%.4+*!.$%(+/$!"+$)+@!$ three years. (See Figures 2 and 3.)F"+.+$/+.31!.$,#2$#44+#/$.3/4/-.-)6$6-(+)$!"+$)3,7+/$%&$9#/)-)6$1-6"!.$.!-11$X#."-)6$%)$<=>.N$+*%)%,-*$'#."7%#/'.:$Y%9+(+/5$!"-.$*%)0'+)*+$.++,.$7#.+'$%)$#$.37.!#)!-#1$.!/#!+6-*$
rethink undertaken in the aftermath%&$!"+$-)-!-#1$+*%)%,-*$*/-.-.:$E)$!"+$WG!"$61%7#1$<=>$.3/(+2$Z*%)'3*!+'$ -)$!"+$0)#1$L3#/!+/$%&$UVWV[5$%(+/$#$!"-/'$%&$<=>.$/+4%/!+'$!"#!$!"+2$"#'$#1/+#'2$*"#)6+'$!"+-/$.!/#!+62$O-)$&3)'#,+)!#1$9#2.Q$%(+/$!"+$4#.!$!9%$ 2+#/.5$#)'$#)%!"+/$"#1&$/+4%/!+'$!"#!$!"+2N(+$O.%,+9"#!$*"#)6+'Q$!"+-/$
strategies. Despite the recent high1+(+1$%&$+*%)%,-*$!3/,%-1$#)'$%)6%-)6$3)*+/!#-)!25$<=>.$,#2$)%9$&++1$,%/+$4/+4#/+'$&%/$&3!3/+$."%*8.$#.$#$/+.31!$%&$!"%.+$.!/#!+6-*$*"#)6+.:$\#)2$0/,.$focused on costs and margins, andeven as markets have reacted to poor
macroeconomic data a nd themenace of sovereign debt contagion,companies in various sectors have/+!3/)+'$"+#1!"2$+#/)-)6.$#)'$4/%0!.:$
C3!$!"+/+$,#2$7+$#$,%/+$&3)'#,+)!#1$*"#)6+$-)$!"+$7#.-.$&%/$<=>$*%)0'+)*+$1+(+1.J$#.$!/#'-!-%)#1$+*%)%,-*$1+#'+/.$.!/3661+$!%$.3.!#-)$#$/+*%(+/25$
+,+/6-)6?,#/8+!$6/%9!"$"#.$"#/'12$!+/+'5$#)'$!"+-/$*%)!/-73!-%)$!%$61%7#1$]RT$#)'$6/%9!"$*%)!-)3+.$!%$/-.+:$F"+$C^E<$+*%)%,-+.$#**%3)!+'$ &%/$B3.!$W_I$%&$61%7#1$]RT$-)$UVWV$73!$#/+$+@4+*!+'$!%$#**%3)!$&%/$GVI$%&$ 9%/1'$]RT$6/%9!"$%(+/$UVWW$#)'$UVWU:$
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PwC Resilient growth: Making the most of opportunities away from home 7
Figure 4: Growth to come in emerging markets’ operations regardless of location
Q: In the next 12 months, do you expect your key operations in these regions to decline, stay the same or grow?
0% 100%
Africa
Asia Pacific
Central andEastern Europe
Latin America
Middle East
North America
Western Europe
Africa Asia Australasia EasternEurope
Latin America
MiddleEast
North America
WesternEurope
Companyheadquarters
Region of operations
93%
73%
80%
67%
70%
64%
72%
89%
88%
87%
86%
100%
94%
92%
33%
77%
83%
18%
50%
71%
57%
100%
40%
73%
59%
0%
67%
75%
100%
80%
80%
86%
0%
80%
86%
75%
70%
55%
47%
85%
73%
75%
29%
40%
71%
48%
25%
67%
55%
36%
32%
69%
31%
0%
51%
48%
Base: Respondents who reported operations in said region (168-672).
Source: PwC 14th Annual Global CEO Survey
!%$`:HI$#)'$!"+$=3/%D%)+$-.$+@4+*!+'$!%$6/%9$72$B3.!$U:VI:$\+#)9"-1+5$+,+/6-)6$,#/8+!.$#/+$+@4+*!+'$!%$6/%9$#!$#$/+1#!-(+12$D+.!2$a:aI:$F"+$most rapid growth in that group is+@4+*!+'$#,%)6$!"+$1#/6+.!$*%3)!/-+.J$<"-)#$#!$b:HI$#)'$E)'-#$#!$c:VI:1$=(+)$these forecasts are uncertain giventhe pace of change across different
markets this year, but they reinforcethe divide between economies that#44+#/$!%$"#(+$6/%9!"$4%!+)!-#1$#)'$!"%.+$!"#!$#44+#/$!%$7+$.!#11-)6:
=(+)$9-!"$.%$,#)2$,#/8+!.$%)$!"+$&#.!$!/#*8$%&$!"+$61%7#1$+*%)%,25$!"+$1+(+1.$%&$<=>$*%)0'+)*+$/+4%/!+'$-)$!"-.$1#!+.!$.3/(+2$/+.31!$.++,$"-6":$<=>$*%)0'+)*+$1+(+1.$9+/+$#1.%$"-6"$-)$!"+$UVV_$.3/(+2:$<=>.$"#(+$!%$7+$7%1'$-)$their growth and communication.!/#!+6-+.J$4+..-,-.,$-.$)%!$9"#!$investors or the markets want to hear.
<=>.$"#(+$#1.%$!/#'-!-%)#112$."%9)$1+..$*%)*+/)$#7%3!$.1%912$+,+/6-)6$%/$1%)6?!+/,$!"/+#!.$!"#)$/-.8$%/$-..3+$+@4+/!.$"#(+:$Y+)*+$9"25$9"+)$.++8-)6$6/%9!"$-)$)+9$,#/8+!.5$<=>.$)++'$!%$strengthen their understanding of thethreats those markets face and to focus%)$/+.-1-+)*+$#6#-).!$#$7/%#'+/$/#)6+$ of risks.
;"-1+$61%7#1$+*%)%,-*$6/%9!"$/+!3/)+'$!%$H:WI$-)$UVWV5$!"-.$"+#'1-)+$063/+$/+X+*!.$!9%$.4++'.$%&$+*%)%,-*$#*!-(-!2:$R+(+1%4+'$,#/8+!.5$9"-*"$/+4/+.+)!$#7%3!$HVI$%&$!"+$9%/1'$+*%)%,25$#/+$+@4+*!+'$!%$6/%9$.1%9125$at an average of 2.2% inUVWW5$1-!!1+$,%/+$!"#)$"#1&$!"+$/#!+$#)!-*-4#!+'$&%/$!"+$9%/1'$+*%)%,2$
%(+/#11:$A,%)6$'+(+1%4+'$+*%)%,-+.5$!"+$d)-!+'$S!#!+.$-.$+@4+*!+'$!%$6/%9$U:aI5$e#4#)$-.$+@4+*!+'$!%$*%)!/#*!$
Figure 3: CEO’s three-year-growth outlook is confident
Q: How confident do you feel in prospects for the revenue growth of your company over the next three years?
Very confident
Somewhat confident
Not very confident
Not confident at all
Don’t know/uncertain
54
38
5
0
2
%
Base: All respondents (201).
Source: PwC Pulse Survey of the International CEO Panel of PwC’s Annual Global CEO Survey, 26 July 2011
1 IMF figures – June 2011 Global Economic Outlook update on April figures; PwC forecasts August 2011.
Armando Garza Sada, Chair man of the Board of Directors, Alfa,S.A.B. de C.V. in Mexico, summed up the calculus that many leadersare using: “We know that the most dynamic markets will be thoseof the emerging countries, mainly Asia, while the markets of Europeand the United States will grow at a considerably slower rate.”
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PwC Resilient growth: Making the most of opportunities away from home 9
O;+$7+1-+(+$-!$-.$(+/2$-,4%/!#)!$!%$#'%4!$.!/-*!+/$/-.8$*%)!/%1$
standards and maintain a monitoring system that is prudent on#$,#*/%$.*#1+$#)'$*#)$6-(+$+#/12$9#/)-)6.$/+6#/'-)6$4%!+)!-#1$
4/%71+,.5Q$.#-'$f-$f-"3-5$T/+.-'+)!$%&$!"+$C#)8$%&$<"-)#:$ O>&$*%3/.+$!"+$-,41+,+)!#!-%)$%&$.3*"$#$4%1-*2$)++'.$!%$7+$
#'B3.!+'$&%/$*%3)!/-+.$#!$'-&&+/+)!$.!#6+.$%&$'+(+1%4,+)!:Q
Section 2]1%7#1$6/%9!"$.!/#!+6-+.J$ &#*!%/-)6$-)$6/+#!+/$%4+/#!-%)#1$*%,41+@-!2$#)'$/-.8
F"+/+$#/+$,#)2$-)'-*#!%/.$!"#!$!"+$4#!"$!%$/+)+9+'$6/%9!"$9-11$)%!$7+$
.,%%!"J$#)$%)6%-)6$=3/%4+#)$'+7!$*/-.-.5$34"+#(#1$-)$!"+$\-''1+$=#.!5$+#/!"L3#8+.$#1%)6$!"+$T#*-0*$^-)6$ %&$g-/+5$,#/8+!$(%1#!-1-!2$9%/1'9-'+5$73'6+!$'+0*-!.5$/-.-)6$*%,4+!-!-%)$Z#)'$4/-*+.[$&%/$)#!3/#1$/+.%3/*+.$#)'$!"+$*%).+L3+)*+.$%&$*1-,#!+$*"#)6+5$to name a few. So, the more countries-)$9"-*"$*%,4#)-+.$+@4#)'$!"+-/$%4+/#!-%).$#/%3)'$!"+$9%/1'5$!"+$ ,%/+$!"%.+$*%,4#)-+.$#/+$(31)+/#71+$to events occurring in every part of !"+$61%7+:$
;"-1+$<=>.$"#(+$7+*%,+$,%/+$%4!-,-.!-*5$_WI$%&$!"+,$#1.%$.#-'$!"+2$
9+/+$O.%,+9"#!Q$%/$O+@!/+,+12Q$concerned about economic uncertainty.F"+$&#*!$!"#!$!"+.+$6/%9!"$+@4+*!#!-%).$#/+$73-1!$34%)$#$.%&!$+*%)%,-*$&%3)'#!-%)$.366+.!.$!"+$4%!+)!-#1$&/#6-1-!2$%&$!"+-/$%4!-,-.,:$
F"-.$/-.82$/+#1-!2$-.)N!$1%.!$%)$<=>.M$they’re putting risk high on their#6+)'#.$#.$.!/#!+6-+.$*"#)6+:$S-@!2?$.+(+)$4+/*+)!$.#-'$!"+2$9-11$&%/,#112$incorporate risk scenarios into their.!/#!+6-*$41#))-)6:$
A)'$_UI$.#-'$!"+2$9-11$'+(%!+$,%/+$senior management time to addressing
/-.8:$^-.8$-.$*%,,#)'-)6$#!!+)!-%)$#!$!"+$"-6"+.!$1+(+1.J$HcI$%&$<=>.$.#-'$!"+2$9-11$'+'-*#!+$,%/+$7%#/'$!-,+$!%$risk. (See Figure 5.)
Figure 5: Strategies are responding to changes in demand
Q: To what degree has your company’s strategy changed over the past two years? Which factor had the biggest impact on your need to changeyour strategy?
Economic growth forecasts or uncertainty
Customer demand
Industry dynamics
Competitive threats
Regulation
Attitude toward risk
Shareholder expectations
Capital structure/deleveraging
%
No change Somewhat changed Changed in fundamental ways
51%
33%16%
23
22
17
10
8
7
6
5
Base: All respondents (1,201).
Source: PwC 14th Annual Global CEO Survey
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PwC0 Resilient growth: Making the most of opportunities away from home 11
A!$!"+$.#,+$!-,+5$<=>.$#/+$-,4/%(-)6$!"+-/$*%,4#)-+.N$%4+/#!-%)#1$/-.8$management. More than three-quarters%&$<=>.$.#-'$!"+2$-)!+)'$!%$*"#)6+$ their company’s approach to risk ,#)#6+,+)!$%(+/$!"+$)+@!$WU$,%)!".$P$UKI$'+.*/-7+'$!"#!$*"#)6+$#.$O,#B%/:Q$;"-1+$!"%.+$4+/*+)!#6+.$.++,$"-6"5$!"+2$/+4/+.+)!$'+*1-)+.$&/%,$#$
2+#/$+#/1-+/5$9"+)$GWI$%&$<=>.$+@4+*!+'$O,#B%/$*"#)6+.Q$!%$!"+-/$/-.8$ management practices.
F"-.$*%31'$/+X+*!$!"#!$,#)2$<=>.$ &++1$!"+2$.3**+..&3112$,#'+$*"#)6+.$ -)$%4+/#!-%)#1$/-.8$,#)#6+,+)!$#)'$ #/+$)%9$*%)0'+)!$!"+2$*#)$!3/)$!"+-/$#!!+)!-%)$+1.+9"+/+:$F"+2$"#(+$ a growing understanding of the#44/%4/-#!+$'-(-.-%)$%&$/+.4%).-7-1-!-+.$ 9-!"$/+.4+*!$!%$/-.8M$.+)-%/$management’s job is to gain acomprehensive understanding of +@-.!-)6$/-.8.5$'+*-'+$"%9$,3*"$/-.8$!"+-/$*%,4#)2$9-11$!#8+$#)'$9"#!$ risks are beyond bounds, map strategy #**%/'-)612$#)'$+).3/+$!"#!$!"+$/+.!$ of the organisation is managing%4+/#!-%)#1$/-.8.:$O;+$#/+$,%/+$sensitive to the risk/reward trade-offs,7+*#3.+$!"+$(%1#!-1-!2$-)$!"+$,#/8+!$created during the recession had a big-,4#*!$%)$,#)2$&%/+-6)$+*%)%,-+.$P$ 9"+!"+/$-!N.$.%(+/+-6)$/-.8$-)$=3/%4+5$*#4-!#1$,#/8+!.$-)$!"+$dS$%/$+*%)%,-*$4%1-*-+.$-)$<"-)#5Q$.#-'$e%")$h:$g#/#*-5$<"#-/,#)$#)'$<=>$%&$dS?7#.+'$E)!+/)#!-%)#1$T#4+/:$O;+$4#2$,3*"$more attention now to making sure
we understand and pressure-test the34.-'+i'%9).-'+$%&$(#/-%3.$'+*-.-%).:Q$
What risks are of increasing-,4%/!#)*+j$;"-1+$,#)2$+,+/6-)6$,#/8+!.$#/+$6/%9-)6$7/-.8125$!"+2$#/+$#1.%$#,%)6$!"+$,%.!$(%1#!-1+:$F"+-/$0)#)*-#1$,#/8+!.$,#2$7+$.37B+*!$!%$."#/4$/+(+/.#1.5$!"+-/$4%1-!-*#1$.2.!+,.$
,#2$7+$3).!#71+5$!"+-/$1+6#1$.2.!+,.$,#2$7+$3)&#,-1-#/$#)'$/+631#!-%).$,#2$7+$3)4/+'-*!#71+:$<%//34!-%)$ Z%/$#!$1+#.!$!"+$4+/*+4!-%)$%&$-![$,#2$ be common, and infrastructure may 7+$4%%/12$'+(+1%4+'$-)$.%,+$/+6-%).:$F"+/+$#/+$3)!#44+'$%44%/!3)-!-+.$4/+*-.+12$7+*#3.+$%&$!"+$,#)2$/-.8.$that make the rewards uncertain.
E)$#''-!-%)5$!"+/+$#/+$#$)3,7+/$ %&$6/%9-)6$61%7#1$/-.8.$!"#!$4%.+$immediate threats in emergingmarkets. Among these are economic'-.4#/-!-+.$!"#!$*#)$1+#'$!%$*-(-1$.!/-&+M$&%%'5$9#!+/$#)'$+)+/62$."%/!#6+.M$*1-,#!+$*"#)6+$7/-)6-)6$-)*/+#.-)612$+@!/+,+$#)'$'+.!/3*!-(+$9+#!"+/5$#1%)6$9-!"$3)*+/!#-)$6%(+/),+)!$4%1-*2$/+#*!-%).M$-11+6#1$#*!-(-!-+.$!"#!$3)'+/,-)+$1+6-!-,#!+$73.-)+..$#)'$6%(+/),+)!.M$#)'$,#*/%+*%)%,-*$-,7#1#)*+.$!"#!$*%31'$1+#'$!%$6/%9-)6$*#4-!#1$X%9.$!%$+,+/6-)6$,#/8+!.$ #)'$4%!+)!-#1$#..+!$73771+.:$
F"+$/-.8.$#/+$'#3)!-)65$73!$!"+$&3)'#,+)!#1$#44/%#*"$!%$41#))-)6$ -.$3)*"#)6+':$<%,4#)-+.$)++'$0/.!$ to decide on their risk appetite and
then on which markets afford thebest opportunities given that appetite,#)'$0)#112$%)$!"+$1-,-!.$&%/$!"+-/$!%1+/#)*+$&%/$/-.8:$F"#!$!%1+/#)*+$ 9-11$'-*!#!+$9"#!$,#/8+!.$!%$#(%-'$ %/$9"+)$-!$-.$!-,+$!%$4311$7#*8$&/%,$those the company has ventured-)!%:$;"-1+$-!$,#2$7+$-,4%..-71+$!%$-'+)!-&2$+(+/2$4%..-71+$1%9?4/%7#7-1-!25$
"-6"?-,4#*!$+(+)!$Z#8#$71#*8$.9#)$+(+)!.[5$*/-.-.$41#).$)++'$!%$7+$-)$41#*+$#)'$9+11$!+.!+'$!%$4/+4#/+$&%/$%/$respond to these rare but devastating4%..-7-1-!-+.:$C+2%)'$!"#!5$1+#'+/.$9-11$ 9#)!$%4+/#!-%)#1$/-.8.$,%)-!%/+'5$/+4%/!+'$#)'$,#)#6+'$#!$#11$1+(+1.$%&$the organisation and throughout its.34412$*"#-):$F"+/+$,3.!$7+$#$*%)!-)3%3.$X%9$%&$34?!%?!"+?,-)3!+$information, from a variety of sources#)'$4+/.4+*!-(+.$#)'$#)#12.+'$!%$'+!+/,-)+$9"#!$-.$/+1+(#)!$#)'$"%9$-!$impacts their organisations.>/6#)-.#!-%).$,#2$7+$'+136+'$9-!"$-)&%/,#!-%)5$73!$3)1+..$!"+2$"#(+$!"+$#7-1-!2$!%$-)!+/4/+!$!"#!$-)&%/,#!-%)5$-!$*#)$7+$3.+1+..$%/$9%/.+$,-.1+#'-)6:$g%/$+@#,41+5$,#)2$*%3)!/-+.$#/+$improving infrastructure or adopting B3'-*-#1$#)'$0)#)*-#1$/+&%/,.:$F"%.+$are important changes to ease doing73.-)+..$-)$!"+.+$*%3)!/-+.:$C3!$-&$!"+$greatest risk to a company is/+43!#!-%)#1$/-.8$'3+$!%$4%%/$!/+#!,+)!$%&$9%/8+/.$72$#$.3441-+/5$)%$#,%3)!$%&$improved infrastructure is going tomake doing business in that country 1+..$/-.82:$
Risk monitoring fordifferent stages of market participation
F"+$6/+#!+/$/+1-#)*+$%)$3)&#,-1-#/$#)'$4%!+)!-#112$(%1#!-1+$,#/8+!.$,#8+.$.!/#!+6-*$41#))-)6$#)'$+@+*3!-%)$,%/+$'-&0*31!:$C+1%9$9+$&%*3.$%)$!"+$/-.8.$*%,4#)-+.$9-11$9#)!$!%$*%).-'+/$ when approaching different stages%&$4#/!-*-4#!-%)$-)$3)&#,-1-#/$ markets and how they can embedrisk monitoring into strategic and
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Market entry
F"+$.3**+..$%&$*%,4#)-+.$!"#!$"#(+$ .+!$34$%4+/#!-%).$#)'$'%)+$9+11$-)$ #$*%3)!/2$9"%.+$]RT$6/%9!"$-.$#44/%#*"-)6$'%371+$'-6-!.$*#)$4/%(+$+)!-*-)6$!%$1#!+*%,+/.:$C3!$#)2$6-(+)$market, no matter the attractions,,#2$7+$#$4%%/$0!$&%/$*%,4#)-+.$&/%,$#$4#/!-*31#/$.+*!%/5$&/%,$#$*+/!#-)$"%,+$*%3)!/2$%/$9-!"$#$4#/!-*31#/$.!/#!+62:$
A key danger is that advocates of +)!+/-)6$#$6-(+)$,#/8+!$9-11$&#-1$!%$ 9+-6"$&#*!%/.$#.-'+$&/%,$!"+$+)(-#71+$%(+/#11$6/%9!"$)3,7+/.:$;"-1+$%(+/#11$6/%9!"$,#2$7+$+@!/#%/'-)#/25$!"+$.#,+$-.$)%!$1-8+12$!%$7+$!/3+$&%/$+(+/2$.+*!%/:$<%,4+!-!-%)$,#2$7+$+(%1(-)6$'-&&+/+)!12$!"#)$,#)#6+/.$"#(+$+@4+/-+)*+'$7+&%/+M$*3.!%,+/.$*%31'$
7+"#(+$'-&&+/+)!12:$=(+)$-&$2%3/$.+*!%/$-.$6/%9-)6$.!/%)6125$!"+$6%(+/),+)!$,#2$7+$)3/!3/-)6$1%*#1$*%,4#)-+.$-)$that sector and protecting them fromoutside competition. And every sector"#.$-!.$%9)$(31)+/#7-1-!-+.:$F"+$+)+/62$#)'$)#!3/#1$/+.%3/*+.$.+*!%/.5$&%/$+@#,41+5$#/+$,%/+$#!$/-.8$-&$!"+/+$ are questions about the sanctity of *%)!/#*!.$%/$+@4/%4/-#!-%)$-)$!"+$prospective new market.
E)$6+)+/#15$#)2$*%,4#)2$+)!+/-)6$ a new market must gather a great'+#1$%&$7%!"$L3#)!-!#!-(+$'#!#$P-)*13'-)6$6/%9!"$/#!+.5$]RT5$demographic statistics, savings rates,+,41%2,+)!$/#!+.$#)'$,#/8+!$.-D+.$ &%/$4#/!-*31#/$4/%'3*!.$P$#)'$L3#1-!#!-(+$-)&%/,#!-%)$!"#!$9-11$ have a major impact on the success
%&$#$73.-)+..$-)$!"#!$*%3)!/2:$F"+$L3#1-!#!-(+$'#!#$."%31'$-)*13'+$information about a country’s/+631#!%/2$+)(-/%),+)!5$1#7%3/$conditions, infrastructure,transparency, corruption, distribution*"#))+1.5$*%,4+!-!-%)5$4/-*-)65$"3,#)$/-6"!.$/+*%/'.5$,%)+!#/2$#)'$0.*#1$4%1-*2$#)'$#$"%.!$%&$%!"+/$&#*!%/.:$F"+)5$*%,4#)-+.$*%).-'+/-)6$!"+$)+9$,#/8+!$,3.!$7+$#71+$!%$.2)!"+.-.+$!"+$data, weigh the various factors anddecide whether the opportunity is#!!/#*!-(+$%)$7#1#)*+:$A11$%&$!"-.$-.$*%,41-*#!+'$72$!"+$&#*!$!"#!$'#!#$#7%3!$+,+/6-)6$,#/8+!.$-.$%&!+)$1+..$/+1-#71+$#)'$,%/+$'-&0*31!$!%$%7!#-)$!"#)$-)$'+(+1%4+'$,#/8+!.:
T%!+)!-#1$/-.8.$#/+$)3,+/%3.:$;"+)$making a decision about whether toenter a new market, a company needsto ask where the country is headed,)%!$B3.!$9"+/+$-!$-.:$]+%4%1-!-*#1$/-.8$ -.$#$,#B%/$*%).-'+/#!-%):$^-.-)6$+@4+*!#!-%).$*%)!/-73!+$!%$/-(#1/-+.$between countries competing toattract waves of new investment.
A$/+1#!+'$*%).-'+/#!-%)$-.$!"+$/+1#!-%)."-4$7+!9++)$#$*%,4#)2N.$"%,+$*%3)!/2$#)'$!"+$4%!+)!-#1$)+9$,#/8+!:$<1+#/125$(+)!3/-)6$-)!%$#$,#/8+!$9"%.+$6%(+/),+)!$-.$"%.!-1+$ to a company’s home country is risky.F"+$1-.!$*%31'$6%$%):$
8/3/2019 Resilient Growth Final
http://slidepdf.com/reader/full/resilient-growth-final 7/15
PwC2 Resilient growth: Making the most of opportunities away from home 13
]+!$1%*#1$
E).-6"!$-)!%$1%*#1$*31!3/+$-.$+.4+*-#112$important for companies entering an3)&#,-1-#/$,#/8+!:$<31!3/+$*#)$7+$#$*/-!-*#1$'+!+/,-)#)!$%&$!"+$73.-)+..$,%'+1$#$*%,4#)2$*"%%.+.$&%/$#$6-(+)$1%*#1+5$-)*13'-)6$*3.!%,+/$&%*3.5$4/%'3*!$%/$7/#)'$1%*#1-.#!-%)$#)'$
'-.!/-73!-%):$E!$*#)$#1.%$7+$#$'+*-'-)6$&#*!%/$-)$!"+$-)(+.!,+)!$(+"-*1+$3.+'5$!"+$.+1+*!-%)$%&$4#/!)+/.$#)'$!"+$composition of management.
<%,4#)-+.$*#))%!$#..3,+$!"#!$!"+2$*#)$.-,412$!/#).41#)!$!"+-/$"%,+$73.-)+..$,%'+1.$!%$#$)+9$,#/8+!:$A$dS$insurance company that hoped to take#'(#)!#6+$%&$/#4-'12$6/%9-)6$*#/$%9)+/."-4$-)$̂ 3..-#$'-'$)%!$0)'$%3!$3)!-1$-!$"#'$,#'+$#$,#B%/$-)(+.!,+)!$!"#!$^3..-#).$9+/+$)%!$&#,-1-#/$9-!"$!"+$*%)*+4!$%&$'+'3*!-71+.:$F"+$*%,4#)2$&%3)'$%3!$!%%$1#!+$!"#!$*%).3,+/.$+@4+*!+'$-).3/+/.$!%$*%(+/$#)2$'#,#6+$!%$!"+-/$*#/.5$+(+)$.,#11$'+)!.$#)'$.*/#!*"+.:$S-)*+$-!$*%31'$)%!$charge enough to make the business4/%0!#71+5$!"+$*%,4#)2$9-!"'/+9$&/%,$^3..-#5$.3&&+/-)6$,#B%/$1%..+.:$
<%,4#)-+.$,3.!$'-&&+/+)!-#!+$7+!9++)$!"+$*31!3/+.$#)'$)%/,.$%&$!"+$,#)2$'-(+/.+$4#/!.$#)'$4%431#!-%).$%&$!"+$
#7%3!$&%/$!"+$4#.!$.+(+/#1$2+#/.$9-11$*%)!-)3+:$\#/8+!.$+(%1(+5$#)'$!"+$#44+#1$%&$+,+/6-)6$,#/8+!.$-.$.4++'-)6$34$+(%13!-%):$F"+$&#*!$!"#!$many emerging markets are growing/#4-'12$#)'$#!!/#*!-)6$)+9$,#/8+!$+)!/#)!.$&/%,$#11$%(+/$!"+$9%/1'$means that there is much more*%,4+!-!-%)$&%/$!"+$1%9?*%.!$1#7%3/$
#)'$)#!3/#1$/+.%3/*+.$!"#!$!/#'-!-%)#112$"#(+$,#'+$!"+.+$,#/8+!.$#!!/#*!-(+:$A.$#$/+.31!5$#**+..$!%$!#1+)!$#)'$/+.%3/*+.$*#)$)%$1%)6+/$7+$!#8+)$&%/$6/#)!+':$<"-)#5$&%/$+@#,41+5$-.$now intent on shifting from being a.%3/*+$%&$1%9?*%.!$,#)3&#*!3/-)6$!%$#!!/#*!-)6$,%/+$"-6"?(#13+$73.-)+..+.:$E!N.$/#-.-)6$!#@+.$%)$&%/+-6)?%9)+'$businesses and offering incentives for"-6"?(#13+$73.-)+..$#*!-(-!-+.5$1-8+$'+(+1%4-)6$*1+#)$+)+/62$!+*")%1%6-+.:$C/#D-15$9"-*"$"#'$7++)$4/%(-'-)6$-)*+)!-(+.$&%/$-)!+/)#!-%)#1$+)+/62$*%,4#)-+.$!%$"+14$'+(+1%4$-!.$6#.$#)'$%-1$/+.%3/*+.5$-.$6-(-)6$T+!/%7/#.5$!"+$state-owned company, a stake in any *%).%/!-#$&%/,+'$!%$+@41%/+$!"+$13*/#!-(+$O4/+?.#1!Q$%&&."%/+$%-10+1'.:2
>)$!"+$%!"+/$"#)'5$9"-1+$-)!+/)#!-%)#1$+)+/62$*%,4#)-+.$#/+$)%!$0)'-)6$C/#D-1$#.$"%.4-!#71+$#$,#/8+!$#.$-!$"#'$been, infrastructure companies are
Have you considered?
Ensuring strategic alignment
k$ Y%9$'%$E$(-+9$/-.8$-)$+,+/6-)6$,#/8+!.5$ -)$4#/!-*31#/$&/%,$#$4%/!&%1-%$4+/.4+*!-(+j
Market prioritisation
k$ E.$!"+$,#/8+!$E$#,$1%%8-)6$#!$1#/6+$#)'$6/%9-)6$ in my sector?
k$ E.$!"+$"%.!$6%(+/),+)!$!/2-)6$!%$4/%!+*!$!"+$ domestic industry in my sector?
k$ Does my strategy mitigate the risk of contracts’ notbeing honoured in the new ma rkets?
k$ E.$!"+/+$#$'#)6+/$%&$+@4/%4/-#!-%)$-)$!"+$)+9$,#/8+!j
k$ A/+$!"+/+$.4+*-#1$1%*#1$/-.8.$&%/$,2$.+*!%/j
k$ A/+$!"+/+$#1!+/)#!-(+5$1+..$4%431#/$,#/8+!.$9-!"$+L3#112$6%%'$6/%9!"$4/%.4+*!.j
k$ ;"#!$9+-6"!$."%31'$E$6-(+$!"+$(#/-%3.$/-.8.$-)$deciding whether to enter the market?
k$ Y%9$.!#71+$-.$!"+$6%(+/),+)!j$;"#!$-.$!"+$/+1#!-%)."-4$7+!9++)$,2$"%,+$*%3)!/2$#)'$!"+$*%3)!/2$%&$!"+$)+9$,#/8+!$E$#,$*%).-'+/-)6j
k$ Y%9$73.-)+..$&/-+)'12$-.$!"+$/+631#!%/2$+)(-/%),+)!j$A/+$'%,+.!-*$,#/8+!$41#2+/.$4/%!+*!+'$72$/+631#!-%).$%/$+)&%/*+,+)!$)%/,.j
Developing entry strategy
k$ Y%9$9-11$!"+$*31!3/#1$)%/,.$-)$!"+$!#/6+!$*%3)!/2$63-'+$,2$'-.!/-73!-%)5$.34412$*"#-)$%/$*3.!%,+/$-)!+/#*!-%).j$Y%9$9-11$!"-.$-,4#*!$,2$*%.!.j
k$ ;"#!$/-.8.$#)'$%44%/!3)-!-+.$'%$!"+$*%3)!/2N.$1#7%3/$*%)'-!-%).5$-)&/#.!/3*!3/+5$1+(+1$%&$!/#).4#/+)*25$*%//34!-%)5$'-.!/-73!-%)$*"#))+1.$%/$%!"+/$&#*!%/.$present?
k$ R%+.$,2$.!/#!+62$,-!-6#!+$!"+$/-.8$%&$ET$1%..j$
A/+$4#/!)+/.N$%7B+*!-(+.$#1-6)+'$!%$4/%!+*!$ETj$ E.$-!$4%..-71+$!%$8++4$!"+$ET$*/-!-*#1$%4+/#!-%).$-)$home markets?
k$ What are the country’s demographics, and how is!"#!$1-8+12$!%$*"#)6+$-!.$1#7%3/$&%/*+$#)'$*%).3,+/$purchasing patterns?
k$ A/+$!"+/+$-)!+/-,$.!+4.$E$*#)$!#8+$7+&%/+$&3112$+)!+/-)6$!"+$,#/8+!j$A/+$!"+/+$.!+4.$E$*#)$!#8+$!%$4/+4#/+$!"+$,#/8+!$.%$-!$-.$,%/+$"%.4-!#71+$9"+)$ E$'%$'+*-'+$!%$+)!+/j
Plan implementation
k$ R%+.$,2$.!/#!+62$,-!-6#!+$!"+$/-.8$!"#!$E$#,$ /+*+-(-)6$4%%/?L3#1-!2$#)'$3)/+1-#71+$-)&%/,#!-%)$about this market?
1-8+12$!%$7+$,%/+$9+1*%,+:$C/#D-1$-.$*3//+)!12$,#8-)6$4/+4#/#!-%).$!%$ "%.!$!"+$.3,,+/$>12,4-*.$-)$UVWa$#)'$!"+$;%/1'$<34$-)$UVWG5$7%!"$%&$ which require major infrastructureimprovements. At the same time,C/#D-1$-.$'+(+1%4-)6$-!.$!/#).4%/!#!-%)$1-)8.$9-!"$!"+$*%3)!/2N.$-)!+/-%/$#)'$it’s seeking foreign investment and
4#/!-*-4#!-%)$&%/$#11$!"+.+$4/%B+*!.:$
<"+*8$#1!+/)#!-(+.$
A)$-).3&0*-+)!12$!"%36"!?%3!$'+*-.-%)$,#2$#1.%$*#3.+$*%,4#)-+.$!%$%(+/1%%8$#1!+/)#!-(+$,#/8+!.$9-!"$+L3#112$6%%'$6/%9!"$4/%.4+*!.:$A$1%9+/?4/%01+$market may afford better opportunities!"#)$#$,%/+$4%431#/$%)+$7+*#3.+$-!$-.$1+..$*%,4+!-!-(+$#)'$1+..$*%.!12$!%$
%4+/#!+$-)$-!:$E)$6+)+/#15$+,+/6-)6?,#/8+!$.!/#!+6-+.$."%31'$*%).-'+/$business needs across markets. Setting34$/+6-%)#1$"+#'L3#/!+/.$-)$!#1+)!$hubs may make more sense than.+!!-)6$34$&311?X+'6+'$"+#'L3#/!+/.$ in every country.
<"%%.-)6$!"+$/-6"!$,%,+)!$!%$+)!+/$ -.$#1.%$*/3*-#1:$F"+$dS$-).3/+/$!"#!$/+!/+#!+'$&/%,$^3..-#$9%31'$"#(+$"#'$#)$+)!-/+12$'-&&+/+)!$+@4+/-+)*+$"#'$ -!$+)!+/+'$!"+$,#/8+!$.+(+/#1$2+#/.$1#!+/:$C2$!"+)5$%!"+/$*%,4#)-+.$"#'$&#,-1-#/-.+'$*%).3,+/.$9-!"$!"+$*%)*+4!$%&$'+'3*!-71+.$#)'$!"+$,#/8+!$7+*#,+$4/%0!#71+:$>/$!"+$*%,4#)2$
*%31'$"#(+$'+(+1%4+'$#$)+!9%/8$%&$+@-.!-)6$7/%8+/.$!"/%36"$9"-*"$!%$.+11$its products rather than entering the,#/8+!$9-!"$&311?.*#1+$%4+/#!-%).:$ F"+$7/%8+/.$*%31'$!"+)$"#(+$1#-'$!"+$6/%3)'9%/8$&%/$#$,%/+$+.!#71-."+'$4/+.+)*+$.+(+/#1$2+#/.$1#!+/:
*%3)!/-+.5$4#/!-*31#/12$-)$!"+$1#/6+.!$markets. And because there can besuch marked differences from region!%$/+6-%)5$-!$-.$*/3*-#1$!"#!$*%,4#)-+.$#-,$!"+-/$73.-)+..$,%'+1.$#!$.4+*-0*$,#/8+!$.+6,+)!.:$=(+)$-)!+/)#1$6/%9!"$/#!+.$*#)$(#/2$'/#,#!-*#112$between different regions of any given*%3)!/2:$=(+/2$#/+#$-.$1-8+12$!%$7+$
'-.!-)*!5$#.$*31!3/#1$&#*!%/.$#/+$%)+$%&$!"+$7-66+.!$*"#11+)6+.$!%$#)2$61%7#1$6/%9!"$.!/#!+62:$e3.!$7+*#3.+$#$company has become acquainted with!"+$*31!3/+$%&$%)+$.+*!-%)$%&$!"+$*%3)!/2$#)'$+.!#71-."+'$#$.3**+..&31$73.-)+..$!"+/+$'%+.$)%!$,+#)$-!$-.$9+11$prepared to do business in other parts%&$!"+$*%3)!/2:$g%/$+@#,41+5$<"-)#N.$1#!+.!$0(+?2+#/$+*%)%,-*$41#)$4/-%/-!-.+.$-)1#)'$6/%9!"5$9"-*"$"#.$1#66+'$7+"-)'$!"+$/+*+)!$7%%,$-)$*%#.!#1$*-!-+.:$S-,-1#/125$-&$#$*%,4#)2$"#.$+.!#71-."+'$#$73.-)+..$!"#!$#44+#1.$!%$%)+$4%/!-%)$%&$!"+$4%431#!-%)5$-!$,#2$9+11$7+$,-..-)6$%3!$%)$%!"+/$opportunities with other segments.
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E)$,#8-)6$!"+$'+*-.-%)$!%$+)!+/$#$ )+9$,#/8+!5$*%,4#)-+.$#1.%$*#))%!$assume that the attractive businessenvironment that they have heard
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development,” Financial Times, 14 November 2010.
8/3/2019 Resilient Growth Final
http://slidepdf.com/reader/full/resilient-growth-final 8/15
PwC4 Resilient growth: Making the most of opportunities away from home 15
And a company attempting to speed34$4/%'3*!-%)$#)'$'+1-(+/2$!%$,++!$ #$'+,#)'$.3/6+$-.$1-8+12$!%$-)*3/$.37.!#)!-#1$#''-!-%)#1$*%.!.:$<%,4#)-+.$may be surprised by surges in demandbecause data may be hard to acquire in+,+/6-)6$,#/8+!.$#)'$9"#!N.$#(#-1#71+$,#2$)%!$7+$/+1-#71+:$E)$+,+/6-)6$,#/8+!.$+.4+*-#1125$-)&%/,#!-%)$,#2$
#1.%$7+$'-&0*31!$!%$6#!"+/$7+*#3.+$!"+$/#!+$%&$*"#)6+$-.$&#.!+/$#)'$"-.!%/-*#1$'#!#$,#2$)%!$4/%(-'+$#$/+1-#71+$indication of the future.
A gap between the information that"+#'L3#/!+/.$#)'$1%*#1$*%3)!/2$,#)#6+/.$/+*+-(+$*#)$#1.%$B+%4#/'-.+$#$company’s success in a distant market.F"+$3)'+/.!#)'-)6$!"#!$*%/4%/#!+$headquarters has of conditions in a)+9$,#/8+!$P$#$(-+9$%&!+)$"+#(-12$-)X3+)*+'$72$!"+$"+#'1-)+.$%&$61%7#1$)+9.$%/6#)-.#!-%).$P$*#)$7+$(+/2$
Market presence
A company that has had a presencein an emerging market for some ti me"#.$#$6/+#!+/$-,4+/#!-(+5$#,-'$(%1#!-1+$61%7#1$6/%9!"5$!%$/+.-.!$*%,41#*+)*2M$!"+$)++'$!%$*%11+*!$'#!#5$,%)-!%/$!"+$business environment and weigh
+(%1(-)6$/-.8.$(+/.3.$!"+$7+)+0!.$%&$,#-)!#-)-)6$%/$+@4#)'-)6$!"#!$4/+.+)*+$*%)!-)3+.:$E!$,3.!$8++4$!#7.$%)$."-&!.$-)$4%1-!-*#1$.+)!-,+)!$#)'$4%9+/$7/%8+/.5$/+631#!-%)5$73'6+!$*%)'-!-%).$#)'$%!"+/$factors. A company that gets off to agood start in a new market may be71-)'.-'+'$-&$-!$#..3,+.$!"+$.-!3#!-%)$ -.$.!#!-*:$E!$."%31'$/+#..+..$-!.$73.-)+..$,%'+1$%)$#$4+/-%'-*$7#.-.M$+)!/2$,%'+1.$,#2$)%!$7+$%4!-,#1$#&!+/$#$2+#/$%/$!9%$%&$*%,4+!-!-%):$<%,4#)-+.$9-11$9#)!$)%!$%)12$+#/12$9#/)-)6.$-&$!"+$73.-)+..$
*1-,#!+$!3/).$#6#-).!$!"+,$73!$#1.%$*3+.$!%$"+14$!"+,$'+*-'+$9"+!"+/$-!N.$!-,+$!%$+@4#)'$%4+/#!-%).:$S3**++'-)6$1%)6$!+/,$/+L3-/+.$%4+/#!-)6$#.$#$/+.4%).-71+$*%/4%/#!+$*-!-D+)5$7#1#)*-)6$+*%)%,-*$/+9#/'.$9-!"$.%*-#1$#)'$+)(-/%),+)!#1$-)(+.!,+)!:$
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)++'$!%$7+$#9#/+$%&$!"+$+@4+*!#!-%).$*%,,3)-!-+.$"#(+$%&$!"+,:$<%,4#)-+.$ 9-11$9#)!$!%$8)%9$9"+!"+/$!"+$environment for foreign investment 9-11$."-&!5$9"-*"$*#)$"#44+)$#)29"+/+:$ A)$A3.!/#1-#)$,-)+/#1.$#)'$+)+/62$*%,4#)25$&%/$+@#,41+5$&%3)'$-!.$7-'$!%$#*L3-/+$#$&+/!-1-.+/$*%,4#)2$-)$#$country where foreign investment has1%)6$7++)$9+1*%,+'$!"9#/!+'$%(+/$the government’s concerns about jobs#)'$4371-*?.+*!%/$/+(+)3+.:$
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Succeeding long term requiresoperating as a responsiblecorporate citizen, balancingeconomic rewards withsocial and environmentalinvestment.
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that the group the proposed insurance 9%31'$*%(+/$4%.+'$)%$/-.8$#)'$!"#!$%!"+/$*%,4#)-+.$"#'$.3**+..&3112$%&&+/+'$!"+$-).3/#)*+:$C3!$"+#'L3#/!+/.$.!%%'$0/,5$#)'$!"+$73.-)+..$%44%/!3)-!2$ 9#.$1%.!:$;"-1+$,#)#6+,+)!$#!$headquarters can receive aninaccurate impression of conditions in#$*%3)!/25$1%*#1$,#)#6+/.N$-)&%/,#!-%)$$can have a vested interest in,#-)!#-)-)6$#)'$73-1'-)6$!"+-/$73.-)+..+.5$.%$!"+2$,#2$7+$-)*1-)+'$ !%$6-(+$%(+/12$/%.2$/+4%/!.$%&$1%*#1$business conditions.
The understanding that corporate headquarters has of !"#$%&%"#'(%#()(#*+(,)-.*&(/()(0%*+("1&*#(2*)0%34(%#56*#!*$(by the headlines of global news organisations — can be very different from what local managers see.
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PwC6 Resilient growth: Making the most of opportunities away from home 17
Understand where you are61%7#112$P$#)'$9"+/+$2%3$ want to be
e3.!$#.$)%$!9%$6/%9!"$,#/8+!.$#/+$#1-8+5$*%,4#)-+.5$#)'$-)'++'$-)'3.!/-+.5$#1.%$(#/2$6/+#!12$#**%/'-)6$to their emerging market strategies.F"+$/+#1-!2$&%/$,%.!$+@+*3!-(+.$considering new markets is that they 9-11$"#(+$!%$,#)#6+$#$)+95$+@!+/)#1$/-.8$.+!5$9"-1+$#!$!"+$.#,+$!-,+$'+#1-)6$ 9-!"$-)!+/)#15$%4+/#!-%)#1$#)'$73.-)+..$risks that companies have to manage#.$!"+2$+@4#)':$R+(+1%4-)6$)+9$4#/!)+/."-4.5$4/%B+*!$0)#)*+5$"-/-)65$#)'$1+6#1$#)'$/+631#!%/2$*%,41-#)*+$-..3+.$#/+$#11$+..+)!-#1$#)'$*%,41+@$#.4+*!.$!%$+)!+/-)6$,#/8+!.$%/$73-1'-)6$,#/8+!$4/+.+)*+:$>(+/$!-,+5$#$*%,4#)2$,#2$,%(+$&/%,$#$&%*3.$%)$+@4%/!-)65$!%$+@4#)'-)6$!"+-/$/+6-%)#1$4/+.+)*+$#)'$
1+(+1$%&$#'#4!#!-%)5$!%$!"+$4%-)!$9"+/+$%(+/.+#.$%4+/#!-%).$#/+$!"+,.+1(+.$#$.%3/*+$%&$4/%'3*!.$#)'$-))%(#!-%):$F"+$]1%7#1-.#!-%)$\#!3/-!2$\%'+1$Z]\\[$(see Figure 7), describes some of thedimensions most affected as companies,%(+$!"/%36"$!"+.+$'-&&+/+)!$4"#.+.:$E!$%&&+/.$#$.-,41+$73!$*%,4/+"+).-(+$framework for decision-makers to-'+)!-&2$.%,+$%&$!"+$8+2$*"#11+)6+.$#!$each stage. Key to this framework is theunderstanding that a company’s61%7#1-.#!-%)$!/#B+*!%/2$,#2$)%!$7+$1-)+#/5$)%!$#11$73.-)+..+.$9-115$%/$."%31'5$,%(+$&/%,$!"+$+@4%/!$!%$!"+$
%/-6-)#!+$4"#.+:$A$*%,4#)2N.$#7.%13!+$4%.-!-%)5$"%9$61%7#1$-!$-.5$-.$1+..$-,4%/!#)!$!"#)$-!.$4%.-!-%)$/+1#!-(+$!%$its major competitors or industry 1+#'+/.:$E)'++'5$-)$.%,+$-)'3.!/-+.$!"+$O+@4%/!Q$4"#.+$,#2$7+$.3&0*-+)!$#.$1%)6$#.$!"+$*%,4#)2$*#)$+).3/+$-!$maintains its competitive advantage.
Figure 7: Globalisation maturity model
Dimension
Phase 1: Export model
Phase 2:Regionalise model
Phase 3: Originate model
Associated risks
Market reach The home market
dominates; foreign sales are
made through representative
offices and third parties
The company has an active
presence in several major
markets outside the home
region, often with local
partners
The company adapts its
market approach for each
region, and may make
long-term structural
commitments to partnership
Aggressive pursuit of sales
growth increases both
delivery and compliance risk
Market offerings Products offered in
non-home regions are
virtually identical to home
market products
Product characteristics are
adjusted for local market
requirements
Product offerings originate in
and are tailored to new
regions and may be sold
globally
How local is local? Countries
such as India, have large
variations in culture, climate
and incomes among, and
even within states.
Is information flowing from
local management to the
Board and vice versa?
Operations The company has a strong
national supply chain withinternational distribution
An increasing proportion of
production and supply islocalised in new regions;
quality systems are evolved
The company manages a
global footprint and usestotal landed cost to
determine sourcing,
production and distribution
locations, with integrated
quality management
What are the critical nubs
along the supply chain? Areas prone to natural
catastrophes? Ports or
airports with high through-
rates that could be affected
by strikes?
Procurement Commodities and
manufacturing services are
procured from low-cost
countries
The company actively
sources in newly targeted
regions and partners with
local companies
The company manages a
global tiered partner network
In both phases 2 and 3
supplier networks can be
a crucial channel for risk
resilience — contagion.
Exposure to disruptions
can be eased by strong
networks. Tiered networks
need careful supervision
to avoid reputational or
corporate social
responsibility issues
IP management IP is closely guarded and
held tightly in the home
market/company
headquarters
The company deploys R&D
centers in expansion regions
The company maintains a
global network to exploit the
wider R&D ecosystem, while
ensuring innovation and
quality in design
Do laws and regulations
exist to protect IP in those
areas — and their
governments ensure they
are enforced?
Capital The majority of capital
financing is provided by the
home region
The investor base becomes
more global and regional
allocations of capital are
increased
Financial structures are
designed to access new
sources of capital in-region
How volatile are local
capital markets?
How interventionist, or not,
have governments been
historically?
Talent The company’s senior
management is based in the
home country andtransferred to new markets
The company recruits locally
and regional management
teams are from the newregion
The senior management
team is composed of leaders
representing their homeregions
How available is local talent?
Will home country managers
be able to adapt to theenvironment? How intense is
competition for talent in the
area?
Operating model The company uses a radial
structure — a dominant hub
with multiple spokes
representing internal and
external partners
The company increases
collaboration, both internally
and with external partners
The company understands
and leverages multiple
operating models to
optimise global opportunities
Proliferation of operating
models creates undue
complexity and lack of
transparency across the
enterprise
Governance and risk The company uses a
traditional command and
control approach with a
functional/business
unit-based structure
Increasing regional dimension
rebalances functional and
business unit roles; regulatory
and compliance procedures
are evolved
The company uses
integrated global/local
governance process and
regional P&Ls in parallel with
business unit-based
performance management
Is the country’s regulatory
and tax system still evolving
rapidly; is it relatively
efficient; what is the likely
outlook for tax agreements
between the home country
and new market? Is there a
culture of good compliance
across the corporation or are
there regional variations?
Figure 6: Three distinct phases of globalisation
Key aspects
of globalisationFirst wave:
Export
Second wave:
RegionaliseNew wave:
Originate
Market reach
Market offerings
Operations
Procurement
IP management
Capital
Talent
Operating model
Governance and risk
! ! !
Source: PRTM Front Line Survey of 30 Global Businesses, December 2009
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PwC8 Resilient growth: Making the most of opportunities away from home 19
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8/3/2019 Resilient Growth Final
http://slidepdf.com/reader/full/resilient-growth-final 11/15
PwC0 Resilient growth: Making the most of opportunities away from home 21
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F"+$4"2.-*#1$/-.8.$4/+.+)!$-)$#)2$.34412$*"#-)$#/+$#1.%$+@#66+/#!+'$ #.$.34412$*"#-).$7+*%,+$1%)6+/$#)'$,%/+$+@!+).-(+:$F/#).-!$!-,+.$*#)$ 7+*%,+$4/%1%)6+'$&%/$,#)2$/+#.%).5$-)*13'-)6$#$'+4+)'+)*+$%)$%)+$,%'+$of transport. A shutdown of theT#)#,#$<#)#1$*%31'$.+/-%3.12$ disrupt a business dependent on."-44-)6$!"/%36"$!"+$*#)#1:$S-,-1#/125$companies dependent on air transport-)$=3/%4+$9+/+$.!2,-+'$72$!"+$E*+1#)'-*$(%1*#)-*$*1%3':$<3.!%,.$'+1#2.5$'+1#2.$-)$.!%/#6+$#)'$!+//%/-.,$*#)$&3/!"+/$'-./34!$.34412$*"#-).:$=@!+)'+'$.34412$*"#-).$,#2$"#(+$#$"-6"+/$1-8+1-"%%'$%&$'-./34!-%)$73!$#1.%$,#2$7+$,%/+$#'#4!#71+5$9"+/+#.$.-,41+$%)+.$#/+$(31)+/#71+$!%$+@*+..-(+$*%)*+)!/#!-%):$
<%,4#)-+.$9-!"$+@!+)'+'$.34412$
chains need to have access to and*%)!-)3#112$#)#12.+$-)&%/,#!-%)$ about any changes that occur in thecountries from which they source.g%/$+@#,41+5$#$*%,4#)2$,3.!$8++4$informed of energy price increasesand resource shortages and the-,4#*!$!"+2$"#(+$%)$.3441-+/.N$ #7-1-!-+.$!%$/+,#-)$-)$73.-)+..:$ E!N.$#1.%$-,4%/!#)!$!%$8)%9$.3441-+/.N$
Have you considered?
k$ R%$E$8)%9$,2$73.-)+..$4#/!)+/.$9+11$+)%36"j$A/+$!"+-/$-)!+/+.!.$.3&0*-+)!12$#1-6)+'$9-!"$,-)+j$E.$,2$'3+$'-1-6+)*+$(-6%/%3.$+)%36"j$S"%31'$E$"#(+$.!/-*!+/$63-'+1-)+.$6%(+/)-)6$9"%,$E$'%$73.-)+..$9-!"j
k$ R%+.$,2$.!/#!+62$,-!-6#!+$!"+$/-.8$%&$,2$.3441-+/.N$going out of business?
k$ A/+$,2$.3441-+/.N$-)!+/+.!.$#1-6)+'$!%$,++!$%3/$standards for business ethics, working conditions,
"3,#)$/-6"!.$#)'$*%,,3)-!2$'+(+1%4,+)!$-..3+.5$*#/7%)$&%%!4/-)!.5$.+*3/-!25$-)!+11+*!3#1$4/%4+/!2$/-6"!.$4/%!+*!-%)$#)'$4/%'3*!$L3#1-!2j
k$ R%$)#!3/#1$/+.%3/*+$#)'$1#7%3/$*%.!.$.!-11$B3.!-&2$sourcing from this market?
k$ E.$!"+$1%*#1$6%(+/),+)!$.344%/!-(+$%&$,2$.3441-+/.j
k$ Y#(+$9+$,-!-6#!+'$!"+$/-.8$%&$%3/$7+-)6$/+1-#)!$%)$%)+$form of transportation or one transportation mode for%7!#-)-)6$!"+$,#!+/-#1.$#)'$4/%'3*!.$9+$)++'j
k$ ;"#!$#/+$9+$'%-)6$!%$,#-)!#-)$!"+$1%2#1!2$%&$%3/$.3441-+/.$.%$9+$'%$)%!$1%.+$!"+,$!%$*%,4+!-!%/.j
k$ How have we mitigated the risk of our competitors’+@"#3.!-)6$!"+$,#!+/-#1.$#)'$4#/!.$9+$/+12$%)$&/%,$%3/$.3441-+/.j
k$ A,$E$/+*+-(-)6$!"+$&++'7#*8$E$)++'$&/%,$*3.!%,+/.j
k$ Y#(+$!"+$/-.8.$%&$!+//%/-.,$%)$!"+$+)!-/+$.34412$*"#-)$7++)$+(#13#!+'j
k$ E.$,2$.34412$*"#-)$(31)+/#71+$!%$&/#3'$%/$*%//34!-%)j
k$ ;%31'$,%/+$+)6#6+,+)!$9-!"$1%*#1$6%(+/),+)!.$7+$"+14&31j
k$ Y#(+$#11$/+1+(#)!$'-&&+/+)*+.$-)$1%*#1$!#@+.5$ *3.!%,.$#)'$/+631#!-%).$#)'$!"+-/$+)&%/*+,+)!$ been assessed?
k$ Y%9$#/+$9+$,-!-6#!-)6$!"+$/-.8$%&$/+631#!%/2$*"#)6+.$!"#!$*%31'$&%/*+$*%).%1-'#!-%)$%&$.3441-+/.j
F"+$4%431#/-!2$%&$+,+/6-)6$,#/8+!.$&%/$.%3/*-)6$*/+#!+.$.4+*-#1$/-.8.:$<%,4#)-+.$.3/(+2-)6$!"+$61%7+$&%/$!"+$7+.!$41#*+.$&/%,$9"-*"$!%$.%3/*+$,#2$0)'$!"+,.+1(+.$'+4+)'-)6$%)$!"+$.#,+$.3441-+/.$%&$8+2$/#9$,#!+/-#1.$and components as their competitors 9%/1'9-'+:$;-!"$.3*"$*%)*+)!/#!-%)5$*%,4+!-!%/.$*#)$#11$7+$(31)+/#71+$!%$
."%/!#6+.$%/$4%1-!-*#1$%/$/+631#!%/2$'-./34!-%).$!"#!$*3!$%&&$.3441-+.$%&$ !"+$*/-!-*#1$,#!+/-#1.:$<"-)#N.$/+*+)!$*3!7#*8$%&$+@4%/!.$%&$/#/+$+#/!"$+1+,+)!.5$)+*+..#/2$&%/$!"+$/+)+9#71+$energy industry, among others, is a4/-,+$+@#,41+:$
<%,4#)-+.$."#/-)6$.3441-+/.$9-!"$%!"+/$*%,4#)-+.$#1.%$/-.8$"#(-)6$-)!+11+*!3#1$4/%4+/!2$.!%1+):$<27+/.+*3/-!2$/-.8.$,#2$#1.%$7+$+1+(#!+'$-)$+,+/6-)6$,#/8+!.$ because it can be harder to conduct'3+$'-1-6+)*+$%)$73.-)+..$4#/!)+/.$ #)'$.3441-+/.$!%$+).3/+$!"#!$!"+2$ #/+$!/3.!9%/!"2:$A.$.34412$*"#-).$
7+*%,+$,%/+$*%,41+@5$-!$,#2$ 7+*%,+$-)*/+#.-)612$'-&0*31!$!%$ ensure that information transmitted+1+*!/%)-*#112$-.$.+*3/+:
Global supply chains andcorporate partnerships aremore complex today thanthey have ever been.
8/3/2019 Resilient Growth Final
http://slidepdf.com/reader/full/resilient-growth-final 12/15
PwC2 Resilient growth: Making the most of opportunities away from home 23
Section 3C#1#)*-)6$%44%/!3)-!-+.$#)'$/-.8.
F"+/+$#/+$,#)2$/+#.%).$&%/$*%,4#)-+.$!%$7+$%4!-,-.!-*$#.$!"+$/+*+..-%)$/+1#@+.$-!.$6/-4$%)$!"+$9%/1'$+*%)%,2:$C3!$3)/+.%1(+'$*"#11+)6+.$!"#!$*%)!/-73!+'$to the recession continue to pose risks,#)'$)+9$61%7#1$/-.8.$#/+$,%3)!-)6:$g-11+'$9-!"$*%)0'+)*+5$73.-)+..$1+#'+/.$*%31'$)+61+*!$!%$*%).-'+/$!"+$4+*31-#/-!-+.$%&$4#/!-*31#/$.+*!%/.5$
9-!"$4#/!-*31#/$73.-)+..$,%'+1.5$ 9-!"-)$4#/!-*31#/$*31!3/+.:$F"+2$,-6"!$%(+/1%%8$'-&&+/+)*+.$7+!9++)$!"+-/$home markets and new markets and#!!+,4!$!%$/+41-*#!+$.3**+..&31$73.-)+..$,%'+1.$-)$3)&#,-1-#/$!+//-!%/-+.:$A)'$!"+2$,-6"!$#..3,+$P$7+*#3.+$,#)2$73.-)+..+.$&%3)'$#$9+1*%,-)6$73.-)+..$+)(-/%),+)!$#$2+#/$#6%$P$!"#!$!"#!$.#,+$+)(-/%),+)!$9-11$4+/.-.!$-)'+0)-!+12:$>)$!%4$%&$!"+.+$#/+$!"+$"-6"?-,4#*!5$1%9?4/%7#7-1-!2$/-.8.$P$1-8+$)#!3/#1$'-.#.!+/.5$%-1$.4-11.$#)'$*-(-1$3)/+.!$P$!"#!$.++,$!%$7+$%**3//-)6$ with ever-greater frequency and that"#(+$!"+$#7-1-!2$!%$'+.!/%2$#$73.-)+..:$
F%$)#(-6#!+$*1+#/$%&$!"+.+$/-.8.5$*%,4#)-+.$9-11$7+$9-.+$!%$&%*3.$%)$ #$/#)6+$%&$.!+4.$/+1#!+'$!%$41#))-)65$4+%41+$#)'$*31!3/+$#)'$4#/!)+/.:$
T1#))-)6$
k$ !"#$"%&'()%*'+,-$&./%)0/1%
appetites and tolerance and3.+$!"+,$!%$63-'+$-)!+/)#!-%)#1$strategy.
k$ Anticipate high-impact risks !"#!$*%31'$7/-)6$2%3/$*%,4#)2$down, and create crisis management41#).$7#.+'$%)$1-8+12$*%).+L3+)*+.$/#!"+/$!"#)$4%..-71+$*#3.+.:$ d)'+/.!#)'$"%9$L3-*812$!"%.+$ risks can affect your company, 2%3/$.3441-+/.$%/$2%3/$*3.!%,+/.:$
k$ 2$/()"%3'-)4/%-)"%/(5#*0"$67&%informed$#7%3!$4%!+)!-#1$"-6"?-,4#*!$/-.8.$.%$!"+2$*#)$*"#11+)6+$!"+-/$<=>.N$#44/+*-#!-%)$%&$#)'$preparedness for those risks.
k$ Embed key risks into your businessplans.$A11$!%%$%&!+)5$ !"+/+$-.$4%%/$1-)8#6+$7+!9++)$
/-.8$-'+)!-0*#!-%)$#)'$73.-)+..$41#))-)6$-)$+,+/6-)6$*%3)!/-+.:$
k$ Analyse information continuously, from a variety of sources representingdifferent perspectives. Draw on+@4+/!.$&/%,$#$(#/-+!2$%&$'-.*-41-)+.$#)'$&/%,$#/%3)'$!"+$61%7+:$
k$ Consider the best pace forentering a new market.$F"#!$*%31'$,+#)$,%)-!%/-)6$#$,#/8+!$3)!-1$ -!$/+#*"+.$*+/!#-)$,-1+.!%)+.M$ B3,4-)6$-)$%)$!"+$6/%3)'$X%%/$7+&%/+$*%,4+!-!%/.$+)!+/M$-)-!-#112$'+(+1%4-)6$#$.,#11$&%%!"%1'5$.3*"$ #.$!"/%36"$#$1-#-.%)$%/$.#1+.$%&0*+.$ %/$/+4/+.+)!#!-(+.M$%/$,%(-)6$#66/+..-(+12$-)!%$#)$#1/+#'2$competitive market.
k$ Test a market by setting upoperations in a similar,neighbouring country.$F"#!$9#25$ #$*%,4#)2$*#)$6/#'3#112$6#-)$&#,-1-#/-!2$9-!"$!"+$*%3)!/2$ #)'$.1%912$73-1'$-!.$4/+.+)*+:$T#/!-*-4#!-)6$-)$B%-)!$(+)!3/+.$#)'$,+/6+/.5$,+#)9"-1+5$+)#71+.$#$*%,4#)2$!%$+.!#71-."$#$.37.!#)!-#1$4/+.+)*+$-)$#$)+9$,#/8+!$#)'$L3-*812$6#-)$8)%91+'6+$%&$'%-)6$73.-)+..$!"+/+$&/%,$1%*#1.:$
O<1+#/125$9+$#/+$)%!$-)$)%/,#1$!-,+.$#)'$.%,+$%7.+/(+/.$
7+1-+(+$P$+.4+*-#112$-)$!"+$#&!+/,#!"$%&$!"+$3)4/+*+'+)!+'$"-6"12$*%)!+)!-%3.$'+7#!+$%(+/$/#-.-)6$!"+$)#!-%)#1$'+7!$
*+-1-)6$-)$%/'+/$!%$4/+(+)!$.%(+/+-6)$'+!$-)$!"+$dS5$!"+$ 9%/1'N.$1#/6+.!$+*%)%,2$P$!"#!$!"+/+N.$#$4%..-7-1-!2$!"#!$!"+$
61%7#1$+*%)%,2$9-11$.1-4$-)!%$#$'%371+?'-4$/+*+..-%)5Q$.#-'$S#BB#)$e-)'#15$h-*+$<"#-/,#)$#)'$\#)#6-)6$R-/+*!%/5$eS;$
S!++1$f-,-!+':$O]%(+/),+)!.$#/+$'%-)6$9"#!$!"+2$*#)$!%$
prevent that from happening, but one cannot know for sure"%9$!"+$61%7#1$+*%)%,2$,-6"!$#(+/!$#)%!"+/$.1-'+:Q$
8/3/2019 Resilient Growth Final
http://slidepdf.com/reader/full/resilient-growth-final 13/15
PwC4 Resilient growth: Making the most of opportunities away from home 25
k$ Collaborate with governments to gain a window into the direction%&$!#@#!-%)5$/+631#!-%).$#)'$%!"+/$8+2$!/+)'.$!"#!$9-11$#&&+*!$)+9$+)!/#)!.N$73.-)+..+.$1-8+$2%3/.$#)'$"+14$2%3$.%/!$%3!$*%)X-*!-)6$#)'$%4#L3+$1#9.:$F%$1#2$!"+$6/%3)'9%/8$&%/$.3*"$*%11#7%/#!-%).5$-!$-.$(-!#1$&%/$managers to network with a range
%&$6%(+/),+)!$%&0*-#1.:$
F"+$,%/+$+@!+)'+'$2%3/$connections, the better prepared 2%3$9-11$7+$!%$9+#!"+/$*"#)6+.$ -)$4%1-!-*#1$4#/!-+.$%/$-)'-(-'3#1$%&0*-#1.:$E!$."%31'$6%$9-!"%3!$saying, however, that the highest-)!+/)#!-%)#1$.!#)'#/'.$%)$#)!-*%//34!-%)$,3.!$7+$34"+1'$ #!$#11$!-,+.:$
k$ Get involved in community development efforts to create6%%'9-11$#)'$+#/)$#$1-*+).+$!%$%4+/#!+$!"/%36"$*%/4%/#!+$.%*-#1$/+.4%).-7-1-!2:$
A.$8)%91+'6+#71+$#)'$.!/#!+6-*$#.$ a company may be about entering#)$3)&#,-1-#/$,#/8+!5$!"%36"5$'-(+/.-0*#!-%)$."%31'$7+$!"+$foundation of its risk management,#2$7+:$m%$,#!!+/$"%9$#44+#1-)6$#$,#/8+!$#)'$)%$,#!!+/$"%9$#.!3!+12$ you oversee your presence there,
!"+$,%.!$'+4+)'#71+$.!/#!+62$-.$)%!$ !%$/+12$%)$-)(+.!,+)!.$-)$#)2$%)+$market but to pursue opportunitiesin many diverse markets at once.
Have you considered?
R+.4-!+$#11$!"+$7+.!$-)!+)!-%).$#)'$!"+$,%.!$/-6%/%3.$41#))-)6$4/%*+..+.5$!"/++$.!/%)6$&%/*+.$*%)!-)3%3.12$threaten to disrupt and distract companies competing-)$3)&#,-1-#/$,#/8+!.:$
1. F"+$(+/2$%4!-,-.,$#)'$*%)0'+)*+$!"#!$.43/$
companies to venture into new markets and pursue7%1'$6/%9!"$%44%/!3)-!-+.$*#)$#1.%$*#3.+$!"+,$!%$-6)%/+$!"+$"-6"?-,4#*!5$1%9?4/%7#7-1-!2$/-.8.$!"#!$*#)$'+.!/%2$!"+-/$*%,4#)-+.:$E!$*#)$7+$'-&0*31!$!%$&%/6+$#"+#'$-)!%$)+9$!+//-!%/2$-&$2%3$&%*3.$!%%$,3*"$%)$#11$!"+$!"-)6.$!"#!$*%31'$6%$9/%)6:$F"-.$-.$#11$!"+$,%/+$/+#.%)$!%$+).3/+$!"#!$)%)+@+*3!-(+$'-/+*!%/.$7+$ 9+11?-)&%/,+'$#7%3!$#)'$&3112$#44/+*-#!+$!"+$"-6"?impact risks companies face and that they *%)!-)3%3.12$*"#11+)6+$!"+-/$<=>.N$'+*-.-%).$/+6#/'-)6$/-.8$#44+!-!+5$!%1+/#)*+$#)'$4/+4#/+')+..$!%$'+#1$9-!"$!"+$*%).+L3+)*+.$%&$"-6"?-,4#*!$/-.8.:$
2. A$/+1#!+'$!+)'+)*2$-.$!"#!$.+)-%/$,#)#6+,+)!$'%+.$not do enough about risk because of the3)4/+'-*!#7-1-!2$%&$!"+$,%.!$'+(#.!#!-)6$/-.8.$!"+2$face. Disastrous events, on the orders of a major+#/!"L3#8+5$S+4!+,7+/$WW5$!"+$]31&$%&$\+@-*%$%-1$.4-115$!"+$+#/!"L3#8+$-)$e#4#)$#)'$Y3//-*#)+$l#!/-)#$"#(+$7++)$.%$/#/+$!"#!$9"+)$/-.8$,#)#6+/.$*#1*31#!+$!"+$4/%7#7-1-!2$%&$.3*"$+(+)!.5$-!$-.$)+61-6-71+:$n+!$#11$those events happened in just the past decade.Managers don’t know how to thin k through the costs (+/.3.$!"+$7+)+0!.$%&$,-!-6#!-)6$.3*"$3)3.3#1$73!$"-6"?-,4#*!$/-.8.5$.%$!"+2$-6)%/+$!"+,:$F"+$'#)6+/.$&/%,$!"-.$-)*1-)#!-%)$!%$-6)%/+$9"#!$-.$.%$'-&0*31!$!%$
#)!-*-4#!+$*#)$7+$%(+/*%,+$72$41#))-)6$&%/$consequences rather than causes, since many *%).+L3+)*+.$9-11$7+$!"+$.#,+$/+6#/'1+..$%&$*#3.+:$
3. Another force is the breakdown in the sharing of information between parts of the organisation that
)++'$-!$P$#$4"+)%,+)%)$9+$*#11$!"+$-)&%/,#!-%)$chasm. Such information breakdowns are key reasons that companies do not do enough to address/-.8:$A.$-)'-*#!-%)$%&$!"+$+@-.!+)*+$%&$.3*"$#$*"#.,5$bKI$%&$<=>.$-)$%3/$.3/(+2$!9%$2+#/.$#6%$.#-'$6+!!-)6$-)&%/,#!-%)$#7%3!$/-.8$9#.$*/3*-#15$73!$%)12$UKI$ of them said they were getting the informationthey needed.
F"#!$*"#.,$*%)*+/).$!"+$."#/-)6$#)'$X%9$%&$/-.8$-)&%/,#!-%)$!"/%36"%3!$!"+$+)!+/4/-.+:$F%%$%&!+)5$-)&%/,#!-%)$#7%3!$/-.8$-.$*%)0)+'$!%$!"+$7%#/'/%%,5$.-1%+'$-)$73.-)+..$3)-!.$%/$1%.!$-)$C2D#)!-)+$-)&%/,#!-%)$.2.!+,.:$=&&+*!-(+$/-.8$,#)#6+,+)!$requires that organisations make sure risk information is shared throughout the enterprise.
F"+.+$-,4+'-,+)!.$!%$#''/+..-)6$/-.8$P4.2*"%1%6-*#1$barriers, the information chasm and high-impact/-.8.$P$#11$41#2$*/-!-*#1$/%1+.$-)$!"+$+,+/6-)6$#)'$%!"+/$3)&#,-1-#/$,#/8+!.$&%/$9"-*"$<=>.$"#(+$.3*"$"-6"$"%4+.:$<%,4#)-+.$!"#!$9#)!$!%$7+$!"+$9-))+/.$-)$!"+.+$+(+/?,%/+?*%,4+!-!-(+$,#/8+!.$9-11$)++'$!%$"#(+$#$'++4$3)'+/.!#)'-)6$%&$7%!"$!"+$4/#*!-*#1$/-.8.$%&$'%-)6$73.-)+..$-)$!"+,$#)'$"%9$4.2*"%1%6-*#1$#)'$%/6#)-.#!-%)#1$7-#.+.$*#)$#,41-&2$!"+.+$/-.8.:$
T+%41+$#)'$*31!3/+$
k$ Create a risk managementculture such that when things6%$9/%)65$+,41%2++.$/+.4%)'$#44/%4/-#!+12$#)'$!%4$,#)#6+,+)!$-.$L3-*812$-)&%/,+':$<%,4+).#!-%)$systems must reward desired7+"#(-%3/.:$F%$!"+$+@!+)!$4%..-71+5$
.4/+#'$!"#!$.#,+$*31!3/+$!"/%36"%3!$.34412$*"#-).:$
k$ Put top talent in charge of key new ventures.$E&$-!$'%+.)N!$&++1$1-8+$!"+$-)(+.!,+)!$-.$9%/!"9"-1+5$-!$4/%7#712$,+#).$!"+$41#).$#/+$!%%$ambitious.
k$ Hire people with culturalsensitivities$#)'$!"%.+$&#,-1-#/$ 9-!"$1%*#1$*31!3/+.:$S%,+$%&$!"+$,%.!$.3**+..&31$*%,4#)-+.$'%-)6$business in emerging markets are*%,,-!!+'$!%$"-/-)6$%)12$1%*#1$+@+*3!-(+.$#)'$,#)#6+/.:$Y-/-)6$1%*#1$#**%3)!#)!.5$1#92+/.$#)'$%!"+/$4/%&+..-%)#1.$*#)$#1.%$"+14:$
T#/!)+/.$
k$ Establish solid partnerships with suppliers that can provide-)(#13#71+$-).-6"!$-)!%$!"+-/$"%,+$*%3)!/-+.5$#.$9+11$#.$!/#).4#/+)*2$into their operations. Strong
/+1#!-%)."-4.$*#)$7+$&%/,+'$72$6-(-)6$.3441-+/.$.-6)-0*#)!$(%13,+.$of business, assisting them with!"+$'+(+1%4,+)!$%&$)+9$*#4#7-1-!-+.$#)'$,++!-)6$/+631#/12$9-!"$ !"+-/$+@+*3!-(+.:$S!/%)65$1%2#1$/+1#!-%)."-4.$*#)$"+14$+).3/+$!"#!$!"+$.34412$*"#-)$,++!.$.3''+)$demand spikes. At the same time,*%,4#)-+.$."%31'$*%).-'+/$diversifying their sourcing toreduce dependence.
There are many reasons forcompanies to be optimistic asthe recession relaxes its gripon the world economy.
8/3/2019 Resilient Growth Final
http://slidepdf.com/reader/full/resilient-growth-final 14/15
PwC6 Resilient growth: Making the most of opportunities away from home 27
S#,41+$F#71+$%&$^-.8.
General risks
k$ =*%)%,-*$'-.4#/-!2
k$ Food, water and energy shortages
k$ <1-,#!+$*"#)6+
k$ E11+6#1$#*!-(-!-+.
k$ \#*/%+*%)%,-*$-,7#1#)*+.
k$ h%1#!-1+$,#/8+!.
k$ d).!#71+$4%1-!-*#1$.2.!+,.
k$ d)&#,-1-#/$1+6#1$.2.!+,.
k$ d)4/+'-*!#71+$/+631#!-%).
k$ <%//34!-%)
k$ d)'+(+1%4+'$-)&/#.!/3*!3/+
Market entry
k$ Differing sector and country growth rates
k$ =(%1(-)6$,#/8+!
k$ ]%(+/),+)!$4/%!+*!-%)$&%/$)#!-%)#1$41#2+/.
k$ <%)!/#*!$4/%!+*!-%)
k$ =@4/%4/-#!-%)
k$ ]+%4%1-!-*#1$/-.8
k$ ^-.-)6$+@4+*!#!-%).
k$ ^+1#!-%)."-4$7+!9++)$"%,+$#)'$"%.!$*%3)!/-+.
k$ <31!3/#1$'-&&+/+)*+.
k$ h#/-#!-%).$-)$*31!3/+5$6/%9!"$/#!+.$#)'$ other factors between regions
k$ <"#)6-)6$+*%)%,-*$+)(-/%),+)!
k$ ^-.-)6$9#6+.
k$ Shifting government incentives
k$ \-.,#!*"+'$/-.8$!%1+/#)*+
k$ E)!+11+*!3#1$4/%4+/!2$4/%!+*!-%)
k$ f#7%/$*%)'-!-%).
k$ E)&/#.!/3*!3/+
k$ <%//34!-%)
k$ ]%(+/),+)!$-).!#7-1-!2
Market presence
k$ <%,41#*+)*2
k$ S"-&!.$-)$4%1-!-*#1$4%9+/
k$ Shifts in power brokers
k$ <"#)6+.$-)$/+631#!-%)
k$ <"#)6+.$-)$73'6+!$*%)'-!-%).
k$ <"#)6+.$-)$!#@$4%1-*-+.
k$ Surges in demand
k$ E)&%/,#!-%)$6#4$7+!9++)$"+#'L3#/!+/.$ #)'$1%*#1$,#/8+!.
k$ f#*8$%&$34?!%?'#!+$'#!#
k$ ]/%9-)6$*%,4+!-!-%)
k$ E)#'+L3#!+$'#!#
k$ <31!3/#1$'-&&+/+)*+.$7+!9++)$/+6-%).
k$ ]%(+/),+)!$-).!#7-1-!2
k$ <"#)6-)6$+*%)%,-*$+)(-/%),+)!
k$ E,4#!-+)*+$
Market exit
k$ C#//-+/.$!%$/++)!/2 k$ ^+43!#!-%)#1$/-.8
k$ T/%"-7-!-%).$#6#-).!$*#4-!#15$4/%0!$/+4#!/-#!-%)
k$ =@-!-)6$!%%$+#/12$%/$!%%$1#!+
k$ <%/4%/#!+$/+.4%).-7-1-!2$#)'$+!"-*.
Supply chain
k$ =!"-*.
k$ Working conditions
k$ Human rights
k$ <%,,3)-!2$'+(+1%4,+)!$-..3+.
k$ <#/7%)$&%%!4/-)!
k$ Security
k$ E)!+11+*!3#1$4/%4+/!2$/-6"!.
k$ T/%'3*!$L3#1-!2
k$ <"#)6-)6$,#/8+!$*%)'-!-%).
k$ ^-.-)6$1#7%/$*%.!.
k$ ^-.-)6$/#9$,#!+/-#1.$*%.!.
k$ F/#).-!$!-,+.
k$ <3.!%,.$'+1#2.
k$ F+//%/-.,
k$ ^-.-)6$+)+/62$4/-*+.
k$ ^+.%3/*+$."%/!#6+.
k$ ;+#8$.3441-+/.k$ E)#'+L3#!+$'%9).!/+#,$'#!#
k$ >(+/'+4+)'+)*+$%)$1-,-!+'$.3441-+/.
k$ <27+/#!!#*8.
k$ >(+/'+4+)'+)*+$%)$%)+$,%'+$%/ route of transportation
k$ Fraud
k$ <%//34!-%)
Contacts and contributors
Miles EversonT#/!)+/5$T9<$dS$m+9$n%/85$mn$oW$ZaGa[$G_W$caUV$
Christopher MichaelsonR-/+*!%/5$T9<$dS$\-))+#4%1-.5$\m$oW$ZaWU[$Hba$GGb_$
A*8)%91+'6+,+)!.
;+$!"#)8$!"+$T9<$+@4+/!.$1-.!+'$#7%(+$9"%$!%%8$!"+$!-,+$!%$."#/+$!"+-/$(-+94%-)!.$9-!"$%3/$+'-!%/-#1$!+#,:
S4+*-#1$!"#)8.$!%$<"/-.!%4"+/$\-*"#+1.%)$&%/$-).!-6#!-)6$#)'$."+4"+/'-)6$!"-.$/+4%/!:$F"+$+'-!%/-#1$!+#,$&%/$!"-.$4371-*#!-%)$-)*13'+'$<"/-.!%4"+/$\-*"#+1.%)5$f-)'#$<%/,#)5$S"+#)#$F#,7%3/6-5$</-.!-)#$A,4-15$f#//2$n35$=,-12$<"3/*"5$f%*8$m+1.%)5$f-.#$<%*8+!!+5$S3D#))+$S)%9'+)$#)'$S"#))%)$S*"/+-7,#):$
E)$#''-!-%)5$S#6+$m+9,#)$&/%,$!"+$=3/#.-#$]/%34$.+/(+'$#.$#)$#'(-.%/$!%$!"+$#)#12.-.$"+/+-):
S"#))%)$S*"/+-7,#)$1+'$4/%B+*!$,#)#6+,+)!$#)'$,#/8+!-)6$+&&%/!.M$e#*L3-$^-(+!!5$]#/2$g#-/,#)$#)'$>'6-.$o$<%,4#)2$ 9+/+$/+.4%).-71+$&%/$'+.-6)$#)'$4/%'3*!-%)M$#)'$A'-7#$l"#)$#)'$F/#*2$g31"#,$*%%/'-)#!+'$%)1-)+$4/%,%!-%):
Alastair RimmerT#/!)+/5$T9<$dl$f%)'%)$+44 (0) 20 7213 2041
Harry G. Broadman\#)#6-)6$R-/+*!%/5$T9<$dS$;#."-)6!%)5$R<$oW$ZUVU[$KWU$VcV_$
F+//-!%/2$*%)!/-73!%/.
f+#'-)6$*%)!/-73!%/.
Brenda EprileT#/!)+/5$T9<$<#)#'#oW$ZGWa[$cab$UKGb
Christof MenziesT#/!)+/5$T9<$]+/,#)2 oGb$Zab[$bHcH$WWUU
Bob SempleT#/!)+/5$T9<$E/+1#)'oKHK$ZV[$W$_bUaGKG
Mark StephenT#/!)+/5$T9<$dl oGG$ZV[$UV$_cVG$KVbc
Keith StephensonT#/!)+/5$T9<$S-)6#4%/+oaH$aUKa$KKHc
Felix SutterT#/!)+/5$T9<$S-)6#4%/+oaH$aUKa$_KGc
Richard SykesT#/!)+/5$T9<$dl oGG$ZV[$UV$_cVG$HGaa
Sandra BirkensleighT#/!)+/5$T9<$A3.!/#1-#oaW$Z_[$KUH_$cGVc
Hans BorghoutsT#/!)+/5$T9<$m+!"+/1#)'.oKW$ZV[$cc$_bU$_a_W
Marie CarrT#/!)+/5$T9<$dSoW$ZKWU[$Ubc$acUK
Ward DuvallT#/!)+/5$T9<$dl oGG$ZV[$UV$_UWU$W_aW
Keith RobinsonR-/+*!%/5$T9<$dl$f%)'%)$+44 (0) 20 721 35554
David Van OssR-/+*!%/5$T9<$dl$f%)'%)$oGG$ZV[$_cVU$UGG$_GW
8/3/2019 Resilient Growth Final
http://slidepdf.com/reader/full/resilient-growth-final 15/15
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