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 assessments.

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 includes:

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 accordingly.

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 sense.

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 achieve.

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.