In spite of a recent downturn in global emerging markets, expert analysts still believe this segment represents vast prospective purchasing power. Therefore, it may be shortsighted to overlook or delay tapping into the potential that exists. How is your business planning to grow? What is your risk tolerance? Can you take advantage of new market expansion? These questions call for serious and urgent consideration.
The underlying logic for expansion is inescapable, since over 95% of the world’s consumers live outside of the United States*. In addition, trade has become much more wide open. This is evidenced by the U.S. having proposed or signed into law dozens of international trade agreements in the past decade. Other global growth catalysts include the positive effects of the monetary stimulus and deleveraging; the Internet and mobile technology, which have connected people and commerce on a vast and escalating scale; plus the reality that consumer demand is increasingly blind to borders or national allegiances.
Perhaps the question is not whether strategic, growing businesses should expand their reach into new markets around the world, but instead, when and how?
* U.S. Chamber of Commerce statistic and U.S. Small Business Administration (PDF)
“By 2025, a new global consuming class will have emerged, and the majority of consumption will take place in developing economies. This will create rich new market opportunities.”McKinsey Global Institute Report, “Manufacturing the future: The next era of global growth and innovation,” Nov., 2012 by James Manyika, Jeff Sinclair, Richard Dobbs, Gernot Strube, Louis Rassey, Jan Mischke, Jaana Remes, Charles Roxburgh, Katy George, David O'Halloran and Sreenivas Ramaswamy
Economic growth, particularly in emerging markets, is already driving global construction to unprecedented levels. But it matters how businesses decide to go about international expansion. If not careful in choosing a reliable, internationally experienced building partner, failure is not just an option; it’s a likely outcome.
The pros and pitfalls of global construction
Global construction creates its own set of rewards and risks. These risks need to be properly mitigated in order to avoid the consequences of ineffectively managed development, poorly designed facilities, shortages of materials, volatile resource prices, regulatory or permit issues, schedule delays, budget overruns, and more.
The potential for risk is also magnified by fragmented interrelationships between all parties involved in the supply chain. This makes it difficult to control for a consistent outcome and can ultimately lead to substantial revenue losses. To further exacerbate the problems, companies attempt to manage the situation, themselves, from thousands of miles away.
All of these issues have caused businesses to think differently about how to approach global construction, and in doing their homework, many have discovered the significant advantages that Butler® and its global network of construction professionals offer.