Building Your Global Strategy · Building Your Global Strategy ... Acquisition strategy Accretive...
Transcript of Building Your Global Strategy · Building Your Global Strategy ... Acquisition strategy Accretive...
3/15/2012
1
© 2012 Crain Communications Inc
Concurrent Session: Sales & Marketing
Building Your Global Strategy
• Adam Pode, Director, Research and Analysis, Europe, Staffing Industry Analysts
• Ton Mulders, Director, Strategic Solutions, Europe, Staffing Industry Analysts
Thursday, March 15 | 1:45 pm | Veranda DE
© 2012 Crain Communications Inc
If the World is your Oyster, …….Where are the Pearls?
3/15/2012
2
© 2012 Crain Communications Inc
Agenda
Source: Alexander Gordin, Wharton Magazine
•Why?• How?•Where?
“For any business in today’s world, not expanding internationally is practically a sin”.
© 2012 Crain Communications Inc
Agenda
• So why expand?• How?•Where?
3/15/2012
3
© 2012 Crain Communications Inc
Where Better Than the USA?
• Improving economy
~ 1.8% GDP growth
• The biggest single market in the world
~ $93.8 billion
• Good predicted growth rates
~ At least 7% for 2012
• 9,000 companies to choose from
Source: Staffing Industry Analysis, The Economist and the US censue
© 2012 Crain Communications Inc
International Growth Drivers
• To meet client expectations• To take advantage of fast(er) growing staffing markets• To diversify your business /reduce dependence on the
USA• Leverage existing corporate technology, know-how and
intellectual property, and…• To take advantage of lower competition (sometimes)
3/15/2012
4
© 2012 Crain Communications Inc
SwedenNorway
Finland
Japan
United States
UnitedKingdom
FranceGermany
Netherlands
Poland
Denmark
ItalyPortugal Spain
Ireland
Canada
Mexico
Brazil
Australia
Confidential Report – NOT for Distribution | ©2012 by Crain Communications Inc. All rights reserved.
South Africa
Argentina
Global staffing market (to scale)
Source: Staffing Industry Analysts
Belgium
Switzerland
© 2012 Crain Communications Inc
A Question of Size
Source: Expansion Patterns of Major European Staffing Companies, Staffing Industry Analysts Briefing, 2009
Staffing Company Annual Sales
Average number of countries in international network
€10 billion plus 29€1 billion to €10 billion 13€500 million to €1 billion 6€100 million to €500 million 5€50 million to €100 million 2Under €50 million 0
3/15/2012
5
© 2012 Crain Communications Inc
US, UK, Dutch and Swiss staffing companies are the most adventurous in expanding into new markets
But now others beginning to show ambitions
Synergie (Fr)Groupe Crit (Fr)Gi Group (It)Trenkwalder (Au)
The Explorers
© 2012 Crain Communications Inc
Whose Eating your Lunch?
3/15/2012
6
© 2012 Crain Communications Inc
Agenda
•Why?• How do I expand?•Where?
© 2012 Crain Communications Inc
Expansion PatternsCultural or geographical proximity
French staffing companies most inclined to launch in Luxembourg
German staffing companies most inclined to launch in Czech Republic or Slovakia
Dutch staffing companies most inclined to launch in Belgium or Poland
US staffing companies most inclined to launch in the UK
UK staffing companies most inclined to launch in the Netherlands
Source: Expansion Patterns of Major European Staffing Companies, Staffing Industry Analysts Briefing, 2009
3/15/2012
7
© 2012 Crain Communications Inc
Acquisition strategy
Accretive to earnings
Speed of entry
Elimination of a competitor
Acquisition of management talent
Economies of scale
Potentially improve technology, products or services
Organic strategy
Generally less expensive
No culture clash or integration issues
Consistency of delivery
Cohesive technology across whole of the organisation
Internal staff development opportunities
Less organisational stress
Buy or Build?
© 2012 Crain Communications Inc
Pick acquisition model in accordance with your management style and acquisition objectives
Centralised
Acquire 100%- Tighter control
Integrate and rebrand
Cut and paste
Export high-performing managers
Service internationalaccounts
Decentralized
Acquire majority- Lower initial investment
Take advantage of synergies but retain brand
If it ain’t broke don’t fix it
Rely on local management expertise
Win local business
Horses for Courses
3/15/2012
8
© 2012 Crain Communications Inc
Agenda
•Why?• How?•Where should I go?
© 2012 Crain Communications Inc
Country Evaluations
Legislative environmentTemporary staffing legislation- Sector prohibitions- Restriction on assignment
duration- Limits on % of agency workers
Protections on dismissal of permanent workers
EconomyGDP 2011-2016
Staffing marketSizeGrowth rateLevel of competition/ consolidation
Business environmentEase of doing businessPolitical stabilityCorruption
3/15/2012
9
© 2012 Crain Communications Inc
Country Staffingmarket size
Regulation1 Ease of doing business2
Economic growth3
Staffing growth 2011
Long termgrowth Potential
Competition/consolidation
Stability/corruption4
Total
China 1 4 2 5 4 5 5 1 27
Australia 5 4 4 3 3 2 1 5 27
Hong Kong 1 4 5 5 4 2 1 4 26
Singapore 1 4 5 5 4 2 1 4 26
New Zealand 2 2 5 3 4 2 2 5 25
India 2 3 1 5 4 5 4 1 25
Japan 5 4 4 1 3 2 1 4 24
1 OECD Employment Protection Index/SIA 2 International Finance Corporation 3 IMF (2011-2016 GDP) 4 World Bank Governance Indicators
5 = Most Attractive, 1 = Least Attractive
Asia Pacific
© 2012 Crain Communications Inc
Country Staffingmarket size
Regulation1 Ease of doing business2
Economic growth3
Staffing growth 2011
Long termgrowth Potential
Competition/consolidation
Stability/corruption4
Total
Sweden 4 5 4 4 4 3 2 5 31
Germany 5 4 4 1 4 2 2 4 26
Italy 4 4 2 1 4 4 4 3 26
UK 5 5 5 2 2 1 1 4 25
Belgium 4 4 4 2 3 2 1 4 24
Netherlands 5 5 3 1 2 1 1 5 23
France 5 2 4 1 3 2 1 4 22
Spain 4 2 3 1 2 4 2 3 21
1 OECD Employment Protection Index/SIA 2 International Finance Corporation 3 IMF (2011-2016 GDP) 4 World Bank Governance Indicators
5 = Most Attractive, 1 = Least Attractive
Western Europe
3/15/2012
10
© 2012 Crain Communications Inc
Country Staffingmarket size
Regulation1 Ease of doing business2
Economic growth3
Staffing growth 2011
Long termgrowth Potential
Competition/consolidation
Stability/corruption4
Total
Poland 3 5 2 3 5 5 2 3 28
Turkey 2 2 2 5 4 5 3 2 25
Hungary 2 4 3 2 4 3 3 3 24
Russia 2 5 1 4 3 5 3 1 24
Czech Republic 2 3 2 3 2 4 3 3 22
Romania 2 2 2 3 3 4 3 2 21
1 OECD Employment Protection Index/SIA 2 International Finance Corporation 3 IMF (2011-2016 GDP) 4 World Bank Governance Indicators
5 = Most Attractive, 1 = Least Attractive
Eastern Europe
© 2012 Crain Communications Inc
Country Staffingmarket size
Regulation1 Ease of doing business2
Economic growth3
Staffing growth 2011
Long termgrowth Potential
Competition/consolidation
Stability/corruption4
Total
Canada 4 5 5 2 3 3 2 5 29
US 5 4 5 3 3 3 1 3 27
Mexico 5 3 3 4 4 4 2 2 27
Argentina 3 3 1 5 2 5 2 1 22
Brazil 5 1 1 4 3 4 2 2 22
1 OECD Employment Protection Index/SIA 2 International Finance Corporation 3 IMF (2011-2016 GDP) 4 World Bank Governance Indicators
5 = Most Attractive, 1 = Least Attractive
North & South America
3/15/2012
11
© 2012 Crain Communications Inc
Country Staffingmarket size
Regulation1 Ease of doing business2
Economic growth3
Staffing growth 2011
Long termgrowth Potential
Competition/consolidation
Stability/corruption4
Total
Qatar 1 1 3 5 5 5 2 3 25
South Africa 4 5 3 3 2 1 2 2 22
Kuwait 1 1 2 5 3 5 2 2 21
UAE 2 2 3 4 3 3 1 3 21
Saudi Arabia 1 1 4 4 2 5 2 1 20
Egypt 1 2 1 4 1 5 4 1 19
1 OECD Employment Protection Index/SIA 2 International Finance Corporation 3 IMF (2011-2016 GDP) 4 World Bank Governance Indicators
5 = Most Attractive, 1 = Least Attractive
Middle East/Africa
© 2012 Crain Communications Inc
Higher Potential
Lower Potential
Not Recorded
Hot Spots
3/15/2012
12
© 2012 Crain Communications Inc
Japan
Sweden
Brazil
Italy
Poland
Qatar
Our Focus
© 2012 Crain Communications Inc
Manufacturing27%
Services57%
Construction 4%
PublicSector
3%
Other8%
Market Size €52 billion
Market Growth 2011 7%
Market Share (Top 3) 13%
Source: CIETT
Source: Staffing Industry Analysts Estimates
Staffing Market FactsStaffing Market by Sector Deployed
Source: IMF
GDP Forecast 2011 +1.4%
Japan
3/15/2012
13
© 2012 Crain Communications Inc
PositivesLarge but condensed market
Highly skilled and well educated workforce
Relatively young market (founded 1986)- Penetration Rate 1.7%- Highly fragmented
Increasing adoption of Western business practices
NegativesLanguage/Culture- Local business partner
Large, well-established local competitors- Includes staffing companies
owned by Panasonic, Fujitso, Nippon Life Insurance, Nissan, Bank of Tokyo/ Mitsubishi, Asahi Mutual Life, etc
‘Job for life’ traditionAgeing population
Japan
© 2012 Crain Communications Inc
Manufacturing15%
Services55%
Construction2%
PublicSector
2%
Other18%
Market Size €6.4 billion
Market Growth 2011 20%
Market Share (Top 3) Fragmented
Source: CIETT
Source: Staffing Industry Analysts Estimates
Staffing Market FactsStaffing Market by Sector Deployed
GDP Forecast 2011 +4.5%
Source: IMF
Brazil
3/15/2012
14
© 2012 Crain Communications Inc
Positives5th largest country (by geography and population)
7th largest economy- One of the fastest-growing- Largest in Latin America- Diverse- Extensive natural resources
NegativesTerm limit on length of assignment - staffing companies are pseudo-
outsourcing companies
Difficult business environment
Low value industry- 4th highest number
of agency temporary workers in world
Brazil
© 2012 Crain Communications Inc
Manufacturing41%
Services49%
Construction 3%
PublicSector
3%Other5%
Market Size €5.8 billion
Market Growth 2011 20%
Market Share (Top 3) 41%
Source: CIETT
Source: Staffing Industry Analysts Estimates
Staffing Market FactsStaffing Market by Sector Deployed
Source: IMF
GDP Forecast 2011 +0.6%
Italy
3/15/2012
15
© 2012 Crain Communications Inc
PositivesRelatively young labour market- Founded 1997
Low levels of competition- Less than 100 staffing
companies in operation (but lots of Executive Search firms)
NegativesVolatile economy- Austerity measures
Staffing companies must conduct business in minimum of four regions
Business concentrated in North
Relatively few multi-national clients
Organised crime
Italy
© 2012 Crain Communications Inc
Manufacturing29%
Services57%
Construction2%
PublicSector
8%
Other4%
Market Size €2.1 billion
Market Growth 2011 21%
Market Share (Top 3) 47%
Source: CIETT
Source: Staffing Industry Analysts Estimates
Staffing Market FactsStaffing Market by Sector Deployed
GDP Forecast 2011 +4.2%
Source: IMF
Sweden
3/15/2012
16
© 2012 Crain Communications Inc
PositivesGood business environment
Stable economy
Well-educated workforce
High wages
Relatively liberal regulatory environment
NegativesHigh taxes
Temporaries must be employed by agency (hence Swedish Derogation)
- 90% pay when not working
Sweden
© 2012 Crain Communications Inc
Manufacturing70%
Services25%
Other5%
Market Size €748 million
Market Growth 2011 20%
Market Share (Top 3) 40%
Source: CIETT
Source: Staffing Industry Analysts
Staffing Market FactsStaffing Market by Sector Deployed
GDP Forecast 2011 +3.8%
Source: IMF
Poland
3/15/2012
17
© 2012 Crain Communications Inc
PositivesPopulation: 38 million- Most populous post-
communist member of EU
One of the fastest growing economies in Europe- No recession!- 6th largest in EU
Good source of skills to export to other marketsWell regulated staffing marketInternational client base
NegativesForeign business disputes issues
Competition from other international staffing firms- Margins under pressure
Mostly blue-collar
Poland
© 2012 Crain Communications Inc
Manufacturing17%
Services45%
Construction12%
PublicSector 14%
Other12%
Market Size €72 million
Market Growth 2011 98%
Market Share (Top 3) Fragmented
Source: Staffing Industry Analysts
Source: Staffing Industry Analysts Estimates
Staffing Market FactsStaffing Market by Sector Deployed
GDP Forecast 2011 +20.0%
Source: IMF
Qatar
3/15/2012
18
© 2012 Crain Communications Inc
PositivesRichest Muslim country
- Banking sector relatively unscathed
Construction boom- World Cup 2022- Tourism
Less than 50 staffing companiesTwo thirds of businesses are international companies- 12 year tax holidays for foreign
investors and foreign companies allowed 100% foreign ownership
- No income tax
NegativesUnusual labour market - Reliance on foreign workers- Qatarization policy- No contract switching
Very conservative and bureaucraticLocal contacts essentialEconomic dependence on oil and gasRegional instability
Qatar
© 2012 Crain Communications Inc
NA staffing companies well-positioned to take advantage of international growth
High growth opportunities outside NAIn established staffing marketsIn emerging staffing markets
The most attractive markets are normally the most competitive
Having the right people just as important as having the right location
Summary
3/15/2012
19
© 2012 Crain Communications Inc
Any Questions?
© 2012 Crain Communications Inc
Survey
0% 10% 20% 30% 40% 50% 60% 70% 80%
Asia Pacific
BRIC
Europe
Latin America
MEA
North America
https://www.surveymonkey.com/s/9QTDJWB
3/15/2012
20
© 2012 Crain Communications Inc
Western Europe CEE CIS
CEEEstoniaLatviaLithuaniaPolandCzech Rep.SlovakiaHungarySloveniaCroatiaBosnia H.SerbiaMontenegroRomaniaBulgariaMacedoniaAlbaniaTurkey
CISArmeniaAzerbaijanBelarusKazakstanKrgyzstanMoldovaRussiaTajikistanTurkmenistanUkraineUzbekistan
WEAustriaBelgiumDenmarkFinlandFran\ceGermanyGreeceIcelandIrelandItalyLuxembourgNetherlandsNorwayPortugalSpainSwedenSwitzerlandUK
© 2012 Crain Communications Inc
Completing SIA’s Global Footprint
3/15/2012
21
© 2012 Crain Communications Inc
European Website