Canadian companies should balance risk with this year's top 10 business
TORONTO, Jan. 18 /CNW Telbec/ - Cost-cutting and pricing pressures will
be major concerns for Canadian businesses in 2011, as they are the
fastest climbers on Ernst & Young's top 10 risks list, according to the
firm's fourth annual Global Business Risk Report.
While this year's report sees the expansion of government's role as a
new entrant to the top 10 risks list, the most significant shifts from
2010 include cost-cutting moving up four places to the number-two
position and pricing pressures moving up 10 places to fifth spot.
"We're seeing intense competition in the global marketplace that only
looks set to escalate," says Anne-Marie Hubert, Ernst & Young's
Advisory practice leader in Canada. "As Canadian companies fight for
market share against a backdrop of slow growth in developed countries
and a land-grab in emerging markets, it's no surprise that pricing
pressure is the biggest climber this year — and, in order to price
right, companies need to optimize costs."
Notably, access to credit has fallen from the number-two risk in 2010,
to the number-seven risk for 2011, indicating some improvement in
business lending conditions.
In light of current and forecasted growth rates, emerging market demand
growth was cited as the top business opportunity for 2011.
"Emerging markets offer enormous potential for growth, particularly for
resource-based exporting economies like Canada, who are chasing an
export-led recovery on the back of weaker currencies," says Hubert.
"Canadian companies would be wise to incorporate some of these
identified opportunities as part of their plans for the new year, if
they haven't already."
The report pinpoints excellence in investor relations as a top 10
opportunity, which is significant for Canada as public companies
complete the transition to International Financial Reporting Standards
this year, and look for ways to be more transparent and win the
confidence of investors.
Innovating in products, services and operations and investing in
cleantech were identified as the second- and fifth-biggest
opportunities respectively for global businesses in 2011. Other trends
identified as important include improving execution of strategy across
business functions, creating new marketing channels with social media
and a growth in public-private partnerships.
Top 10 global business risks for 2011: (2010 ranking from in brackets)
Regulation and compliance (1)
Slow recovery/double dip recession (3)
Market risks (new)
Pricing pressure (15)
Managing talent (4)
Access to credit (2)
Social acceptance risk/corporate social responsibility (9)
Expansion of government's role (new)
Emerging technologies (13)
Top 10 global business opportunities:
Emerging market demand growth
Innovating in products, services and operations
Improving execution of strategy across business functions
Investing in IT
Investing in cleantech
Investing in process, tools and training to achieve greater productivity
Mergers and acquisitions
New marketing channels
Excellence in investor relations
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and
advisory services. Worldwide, our 141,000 people are united by our
shared values and an unwavering commitment to quality. We make a
difference by helping our people, our clients and our wider communities
achieve their potential.
For more information, please visit ey.com/ca.
Ernst & Young refers to the global organization of member firms of Ernst
& Young Global Limited, each of which is a separate legal entity. Ernst
& Young Global Limited, a UK company limited by guarantee, does not
provide services to clients.
For further information: