This report explores why some US mid-market companies are keener than others to go abroad. The main findings of the report include:
- International and domestic companies form two distinct groups, with surprisingly few of the latter internationalizing.
- International businesses believe that expansion beyond North America is more than a simple opportunity: it is a strategic necessity driven by globalization. Accordingly, they have expanded overseas in search of long-term growth rather than immediate profits. Domestic firms consider overseas expansion a potentially dangerous distraction, but often spend too little time examining the issue in depth.
- As domestic companies benchmark themselves on financial performance as highly as international firms, many of the former are not currently facing economic pressure to consider potential benefits of international growth.
- Domestic companies tend to be smaller and privately held. They also face less competition from foreign companies and tend to grow in the home market before expanding internationally.
- For domestic companies, contending with foreign competition in their home market has been a key driver of internationalization. Firms less affected by the outside world seem more capable of, or content to, ignore it. However, proceeding under the assumption that such foreign competition will remain muted is a substantial risk.
- International companies are finding success abroad through a combination of long-term planning, understanding local markets, hard work and patience. As economic power shifts towards emerging markets,international companies are exhibiting less interest in investing in major European states and more interest in Latin American nations.