Keep one foot in your own yard

In offering up strategies for the chemical process industries (CPI), many business experts turn to the virtues of a global stage. For decades now, CPI companies in developed countries have eagerly followed the urge to expand into emerging regions. Likewise, geographical expansion is becoming attractive for companies in developing areas as they look to catalyze their own growth. A new analysis, however, shows that the grass is not necessarily much greener on the other side and instead advocates more of a straddle-the-fence approach. The Accenture Research (New York; www.accenture.com) study of approximately 100 chemical companies and business units aims to understand how chemical companies most effectively manage the cyclical nature of the industry. Perhaps surprisingly, the results show that while many companies only consider foreign markets for growth, “home teams perform best,” says Paul Bjacek, Accenture Research global chemicals and natural resources lead, and coauthor of the study findings. In fact, the research shows that high-performance chemical companies have no more than 45% of sales outside of their home markets. This phenomenon can be explained, Bjacek says, by the fact that producers with a stronger emphasis…