The rise of the micro multinationals, described as a new breed of company challenging old ways and breaking the mould, is examined in a newly-published report issued by HSBC.
In the report, entitled ‘The Rise of Micro Multinationals’ the banking group categorises its members as essentially dynamic, mid-sized companies that identify themselves as “global” in terms of how and where they operate, but which tend to be smaller and nimbler than traditional large corporates, with a turnover of between US$50m-250m.
“For decades, the biggest firms operated internationally, while smaller firms tended to be domestic,” note the authors. “Today, nimble mid-sized firms are taking on new markets earlier in their business cycle.
“This audacious expansion is changing the face of global commerce; challenging bigger, more established players and providing plenty of models for smaller firms to learn from.”
The report explores the hurdles that micro multinationals must overcome as they begin to operate internationally, and outlines some of the emerging best practices which can help companies of this size succeed and thrive in overseas markets.
Micro multinationals typically share the following five traits:
1. Global mind set: Often mirroring the mind-set of the global citizen; thinking across borders and having the confidence to innovate.
2. Intermediate: Typically having annual turnover of around US$50m-US$250m.
3. Agile: Expanding internationally early in their lifecycle, agile and with a clear strategy for each market
4. Niche: Offering new ideas or ways of doing things, often specialising in one part of the production cycle or providing highly specialist goods or services.
5. Tech savvy: Adopting new technology to foster their network and brand; capitalise on the global nature of social media.
The report also identifies five shared concerns:
• Establishing new partnerships.
• Finding employees with international experience.
• Working capital.
• Cash flow and the visibility over their cash flows.
• Supply chain efficiency.
“The ability to manage finite financial resources is similarly important and one of the largest challenges for micro multinationals seeking to expand across multiple jurisdictions,” the report’s authors comment. “Those that master this are well on their way to becoming the next breakthrough corporation.”
Far and away, the largest financial market on the planet is the foreign exchange currencies market, where on average individuals and organisations trade more than $5 trillion daily. In the FX world, the ability to master the market isn't considered a luxury for treasury officers–it's a necessity.
Apps are a critical part of treasury's shift into mobile banking as 67% of treasury and corporate finance professionals said mobile banking services are of particular interest to them in a recent survey.
Using data for predictive analytics is the future of banking success, argued Jean-Laurent Bonnafé, CEO of BNP Paribas, in his session on how the bank is reinventing its approach to innovate with and for corporates.
The annual BNP Paribas Cash Management University kicked off on Thursday morning with treasury professionals congregating in Paris from across Europe.