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Mid-Size Companies Mixed on Global Market

While some firms are looking to go global, many see no pressing need to look beyond the U.S.

A recent survey of U.S. mid-size firms found that the majority—albeit by a relatively narrow margin—remain domestic-market oriented. Among 356 senior executives participating in a survey by the Center for the Middle Market at Ohio State University, 55 percent reported selling and operating solely within North America. Of these domestic-oriented firms, only 27 percent plan to become active beyond North America in the next three years—and just 7 percent report that they are currently expanding overseas.

In fact, even companies that already engage in sales or operations beyond the continent—including everything from simple exports through engaging in manufacturing on foreign shores—remain focused primarily on the U.S. market. Sixty-four percent of this international segment note that only a minority of their activities are conducted outside of North America, and just 11 percent—or 5 percent of all respondents—say that a majority are.

Why are so many mid-market companies reluctant to join the global market? Fear seems to be a factor. Eighty-two percent of domestic firms say that their focus on the home market arises from a strategic choice. These businesses see international markets as an expensive, possibly risky, diversion. Fifty-nine percent believe that the costs of expanding abroad would outweigh the benefits.

However, those who have taken the international market plunge have largely come to believe that global markets represent the future, with many committing to further expansion abroad. Ninety-four percent of companies with a global presence report plans to expand that presence in the next three years, and 57 percent say that international sales have met or exceeded expectations.

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