The most popular growth strategy for mid-market (annual revenues $50M – $1B USD) companies in the US this year is domestic target market expansion, according to a survey conducted by Deloitte in February 2011. Results from “Mid-market Perspectives: 2011 Report on America’s Economic Engine” indicate 56% of mid-market companies intend to pursue this strategy for growth in 2011.
Upselling, Product Expansion Also Popular
Other popular mid-market growth strategies for this year include upselling/cross-selling into existing customer base(s) and expanding/diversifying product/service offerings (46% each). There is then a substantial drop in popularity between these two strategies and the next-most-popular strategy, expanding target markets globally (34%). In turn, the next-most-popular strategy, purusing/expanding third-party alliances in the US, was only selected by a little more than half as many respondents (18%).
US/Canada Seen as Main Growth Driver
The US/Canada market was selected as a geographic market contributing most to both in the past three years (81%) and the next three years (68%) by overwhelming majorities of respondents. The next-most-popular market contributing to prior growth was Western Europe (15%), while Far East (excluding China and India) ranked second as a growth contributor for the next three years (17%).
Interestingly, China ranked fourth as a prior growth contributor with 9% (more than one response allowed) and tied for third as a future growth contributor with Western Europe (15%).
6 in 10 Mid-market Firms Will Have Foreign Workers
Although six in 10 (61%) mid-market firms had no foreign workers before the recession (2007), roughly the same percentage (57%) will have at least 1% of their workforce based outside the US by 2014. The largest share (29%) expect to have 1-25% of their workforce consist of foreign employees by that point.
1/3 of Mid-market Firms See Selves as Likely Acquirers
About one-third (35%) of mid-market firms say it is very or quite likely they will acquire another company in a merger this year, although about half (49%) say this is not likely or highly unlikely. Ten percent are not looking to acquire a company but would consider a deal.
On the other side of the merger-acquisition spectrum, seven in 10 (72%) mid-market firms say it is not likely or highly unlikely they will be the target of an acquisition this year. Only 15% say this is very of quite likely, with 7% not looking to be bought but willing to consider a deal.
Assets, Cash Most Popular Financing
Looking at forms of financing mid-market companies expect to pursue in 2011, the most popular are asset-based (35%) and cash flow (32%). Internal sources (25%) have a slight edge on private sources (23%). A notable minority (14%) do not plan to seek any financing this year.
Amex: Mid-sized Finance Execs Look for Growth Opps
A majority of finance executives at mid-sized US companies are looking for growth opportunities in the next two years, according to December 2010 survey data from American Express and CFO Research Services. Data from “Winning Strategies in the Emerging Recovery” indicates 63% of mid-sized finance executives seek to identify growth opportunities in the next two years, 117% more than the 29% who say they sought to identify growth opportunities in the past two years.
About the Data: During February 2011, Deloitte conducted a survey of 527 executives of private and public companies with annual revenues between $50 million and $1 billion.