Canadian companies face many barriers in quest of global footprint

One in four businesses considering international expansion don't know where to start.

MONTREAL — Almost a quarter of the Canadian companies considering international expansion don’t know where to start, according to a survey by Aimia Inc.

The survey, 100 Global Champions: Supporting International Success for Mid-sized Canadian Companies explores the challenges and opportunities facing businesses to expand outside of North America.

It looked at nearly 350 companies headquartered in Canada that had a minimum of 50 employees, and were either considering global expansion, had already expanded, or were not considering expansion.

The research reveals that for those considering, 24% don’t even know where to start.

These companies face additional challenges including not having the insights to identify markets for expansion (46%), and not knowing the steps required to take their business overseas (63%). Furthermore, half (51%) don’t know if their company is ready.

Conversely, 90% of those Canadian companies that have expanded globally claim they were successful.

While global companies report substantive benefits, six out of 10 not currently considering expansion don’t see an advantage of going global. Furthermore, 74% of companies in this group have no long-term desire to expand beyond North America, and 80% say their businesses are not well suited to expansion.

What is holding Canadian business back?

The research outlines four major perceived barriers to global expansion: knowledge, talent, resources and risk exposure.

Forty-five per cent of companies considering expansion do not have the right local insights or partners.

Additionally, even with Canada’s diverse and well-educated population, 37% of respondents considering expansion report lacking the talent they need to succeed globally.

Other findings include:

Support services are underused – While companies are aware of the 11 Canadian support services listed, including development banks, chambers of commerce, and government agencies, few engage them for support, with service-based companies engaging them less often (13%) than their goods-based counterparts (22%), on average.

Personal connections matter – Nearly a third (30%) of service-based companies and 44% of goods-based companies leverage their personal connections for support in going global.

A clear opportunity to build Canada’s knowledge economy – The majority of companies considering global expansion are service-based (60%), yet half (50%) of service-based companies feel they don’t have adequate support and resources to make the move outside of Canada.

Aimia is a data-driven marketing and loyalty analytics company headquartered in Montreal. It has 3,200 employees in 17 countries.

Download a copy of the report here.

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