News flash

ICA Global Performance Index 2007/2008:
Investment Globalization Impervious to the Foreign Profitability Cycle

Multinational firms operating in the computer (network) industry are among the leading international performers who have managed to realize an exceptional return on their foreign productive activities. The table below shows the top-10 performers over 2006 measured along the ICA – Global Performance Index (GPI), the return on foreign assets.
 
1.Cisco Systems
2.Microsoft
3.Apple
4.McKesson
5.Accenture
6.Nike
7.Cardinal Health
8.Hewlett-Packard
9.Paccar
10.United Technologies

Douglas van den Berghe, managing director of Investment Consulting Associates: “The top performing firms seem to be able to manage their globalization process very successfully, making it a successful business strategy. Most of the exceptional performers have been able to find the right balance between their domestic activities and those offshored and outsourced to (emerging)markets – something we qualify as the optimal level of globalization. In addition they have been able to strategically tap into local talent pools and realize an effective supply chain management strategy.” “Illustrative for the better performing firms is their ability to control the pace of globalization by building up a foreign presence. Slow is better seems to be the lesson as it is associated with the highest levels of foreign profitability.”.

The report highlights that international expansion by large multinational corporations is not always a profitable proposition. On average it is accompanied with very volatile levels of foreign profitability. At the same time given competitive pressures, international expansion is a forced proposition and inevitably for many firms operating in global industries.

Steady Globalization but greater, volatility in foreign investment profits
Over the last decade globalization of foreign production and foreign turnover has developed progressively and very steadily. However, the profitability of foreign operations has been very volatile and subject to much greater variety. For many global operating firms globalization has continued despite the absence of profitability, making it a forced proposition.


For more information to access the ICA-GPI Database please see www.ic-associates.com


The report by Investment Consulting Associates Ltd. (ICA): “ICA Global Performance Index 2007: Investment Globalization Impervious to the Foreign Profitability Cycle” can be downloaded on this website as well.
 
 

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