Canadian manufacturers are notorious for being a conservative
bunch—opting to rely on tried-and-true growth strategies
rather than taking on bolder endeavours. Judging by the responses
in Manufacturers' Outlook
2016—an annual industry report published by PLANT
magazine and sponsored by Grant Thornton LLP—this trend seems
to be holding steady, despite a changing global marketplace. And
that needs to change.
The manufacturers surveyed revealed that some of their top
growth initiatives over the next three years will be new product
development (56%), pursuing new customers in North America (55%)
and pursuing new customers globally (44%)—although only 25%
were actually planning to enter new foreign markets.
While these are integral elements to any growth strategy, there
seems to be a disconnect between manufacturers' growth goals
and their execution.
The vast majority of respondents—63%—said they were
opting to take a flexible approach to strategy and planning,
choosing to revise their plan as needed. A mere 10% had a formal
process in place, and only 6% said their plans involved a formal
process that used strategic planning tools and third-party
Today's marketplace is significantly different than it was
even just a few short years ago. When facing increased competition,
changing consumer demands and ever-evolving global markets,
it's not enough to just wing it. To succeed, Canadian
manufacturers must embrace a new approach to growth, one that
A long-term mindset
In the past—particularly during the economic
crisis—it made business sense to take a short-term approach
to growth. Eight years out, however, normalcy has (somewhat)
returned—and Canadian manufacturers need to adjust
This means looking beyond the next quarter—or even the
next year—and mapping out a formal, sophisticated growth
strategy for the years to come. The best strategies are clear,
measureable, facilitate accountability and make it very easy to
identify progress. They're also reviewed and revised regularly.
Above anything else, they should help you nimbly identify the
growth options that align with your business's vision, evaluate
them and effectively execute them.
Thorough market research
Growth is risky—there's no doubt about it—but
with the proper research in hand, it is much less so. Research also
gives you the confidence to explore uncharted waters, identify
lucrative opportunities and provide the push you need to get out of
your comfort zone.
While the Internet is a good starting point for market research,
you should also consider attending relevant seminars, speaking to
government agencies—such as EDC, Industry Canada, The
Canadian Trade Commissioner Service and more— or seeking the
help of advisors with experience.
When conducting research, pay particular attention to different
cultural nuances and consumer lifestyles, and map out your
potential supply chain and distribution channels. You may also want
to consider the best business structure for your new
arrangement—sometimes a joint venture or acquisition make the
most business sense, and may even minimize risk.
The right funding
In the survey, 48% of respondents said they plan to fund growth
initiatives through internally-generated cash flow (down from 70%
the year before), while 41% said they will likely turn to bank
financing. While these are fine funding options in their own right,
they may not be the best fit for your growth goals.
When sitting down to consider your long-term growth strategy,
you should also be thinking about funding. There are a host of
different financing options available, and some are more likely to
suit your goals, timelines and lending preferences better than
others. Depending on your needs, the cheapest funding option might
not be the best—and other times a combination of many
different types of financing arrangements might make the most
If Canadian manufacturers are going to succeed in this new
global marketplace, they must edge out their competition by
establishing a path to growth that is clearly defined,
well-researched and appropriately funded. With their eyes focused
clearly on the prize, there's nothing they can't
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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