International Business Report 2008 - Global overview
International Business Report 2008 - Global overview
The financial turmoil of the past year has dramatically changed the plans and outlook for privately held businesses (PHBs) the world over. Such businesses, including entrepreneurs, family businesses and non-listed entities account for over 98 per cent of businesses worldwide and are considered the lifeblood of the global economy.
The Grant Thornton International Business Report (IBR) 2008 expanded this year to cover 7,800 respondents from 34 economies in its 16th year of existence.
This year’s research coincided with the growing international economic disquiet following the ending of the most protracted global boom in a generation. The reversal was felt most acutely in mature economies, notably the United States; however the effects are being felt across the world.
Although the decline in overall business confidence was not dramatic at a global level (down just 5 percentage points on 2007) expectations for revenue in the year ahead fell from the 2007 all-time high of +70 per cent to +63 per cent and exports from a balance of +20 per cent to +18 per cent.
Figures were, in part, held up by rapid growth from emerging economies who are benefiting from strong domestic demand, helping insulate them from falling demand by the United States.Momentum in some cases was sustained by soaring commodity prices, particularly for oil and food.While price increases are beneficial for many businesses, they have served to rekindle inflationary pressures across the globe. After the subdued inflation of the past decade, this creates a new challenge for PHBs. This is demonstrated in PHBs’ expectations for selling prices, having increased from +11 per cent in 2003 to +30 per cent this year as businesses expect to recoup a proportion of higher input costs from consumers.
This research was conducted just six months into the ‘credit crunch’ and provides an excellent trend analysis of expectations among PHBs as well as providing a benchmark for years to come.
This report also examines a number of key issues that PHBs need to manage in order to survive the economic downturn and be well prepared for the upturn. Issues such as human resource strategies, merger or acquisition plans and competitive strategies will be examined offering solutions and action areas in order to help cope with the changing environment.
PHBs will need to make fundamental changes to their strategies and how they assess risks and opportunities. There are undoubtedly going to be casualties, even if a widespread recession is averted, with only the most decisive and well-managed businesses emerging as market leaders.