Following the excellent feedback we received after the first two events, Auxadi held a new event within its conference cycle, covering the Internationalisation of the Company in the new global context, and organized with APD.
Introduced by Alejandro Solvay (Director of APD Levante), the event was moderated by Víctor Salamanca, CEO of Auxadi, and the panel consisted of Pablo López Gil (General Director of the Forum of Spanish Renamed Brands), Carlos Castro (Grupo Aldesa), Carlos Espejo (Head of the Cross-Border Business, Business Banking at BBVA), Gemma Ordás (CFO of Esteyco) and Eva Sánchez (Global CFO and Innovation Leader at Findasense).
In his introduction, Victor Salamanca reviewed the global and Spanish macroeconomic situation, as well as the status of the current Spanish business fabric. The session began with a question regarding the recent acquisition Auxadi has made, Resolve BPO in Central America. Victor Salamanca replied “We offer services in 50 countries and, after the acquisition of Resolve, we have 100% owned subsidiaries in 22 of those countries. Resolve has been a partner of Auxadi for five years, helping our customers in Central America, and its integration into Auxadi is a natural step in our relationship. We use organic growth and inorganic growth M&A to keep growing business corridors between Europe, the Americas and the rest of the world.”
The event continued with a common question issued to all participants about their views on international expansion and the opportunities offered by it in the current context.
BBVA’s Carlos Espejo sent a message of optimism based on the data: “After a very tough year, with countries like Peru with double-digit GDP declines, you have to be positive. All indicators show that we are going to grow. We think the future is going to be hopeful.”
On the role of the brand in the internationalisation process, Pablo López Gil emphasized that “It is important that we understand the competitive advantage that we have in the internationalisation process; that the brand is an element of differentiation and creator of lasting value in the long term. The brand allows you to generate preference, trust, access financing to operate with better margins, attract and retain talent, and even to promote internationalization itself, and open new markets.”
Gemma Ordás, spoke about Esteyco’s experience with internationalisation, using the concrete example of a sector currently on the rise: “Latin American countries are putting a lot of interest in the renewable energy sector and are receiving a lot of foreign investment.”
She stressed that “It is essential to have trusted suppliers, because it is very important to know how countries work. They are different and therefore, complicated markets,” before announcing Esteyco’s forthcoming opening in the United States; a key country for its future growth.
Carlos Castro offered this advice for international expansion: “First of all, ask if the country is interesting, if it has growth parameters. It is important to understand the country, and its possibilities, through macroeconomic studies. It also helps to have a physical presence; visit the country, and rely on aid agencies to help. It is also essential to know the attributes of taxation, legal and regulatory issues very well, as these can bring a lot of value to a partner who guides your entry. Once this is determined, we try to make them projects of high complexity, where we excel at providing value.”
Eva Sánchez explained how technology plays a leading role in a company like Findasense, and its innovative internal management system – using dashboards so that each team member knows their objectives and how they are contributing to the company: “Findasense has made an investment in important technology; work tools, communication tools, support tools… This has allowed us to follow the same quality standard, for example during the pandemic. Our organizational culture is transparent, management-oriented and people-oriented.” Eva also stressed the importance of “encouraging digitization and innovation as a key to adapting to the needs of consumers, especially in the post-pandemic world.”
The event ended with reflections on questions submitted by attendees. On the aspects that can be improved in expansion processes, Victor Salamanca advised to make sure “the error is as small as possible, because the error will always exist. So, the key is to be prepared and serve and learn, to be supported partners, through preparation and responsiveness.”
To close, the different speakers agreed that what awaits Spain in the future is a time of growth, which seems to receive a very significant amount of the funds of the Next Generation EU Plan, and that international expansion should be beneficial for companies.
With this session, Auxadi and APD complete their cycle of conferences on internationalization. An initiative through which Auxadi, as a Spanish company, as a member of the Forum of Spanish Renowned Brands, and a company operates in more than 50 countries through its 22 international subsidiaries, has joined APD in its support of Spain’s business fabric with a focus on internationalization as a development strategy.
The different sessions held have had the participation of top Spanish companies such as Abanca, Catenon, Gransolar and Sons of Rivera and institutions such as CEOE and IGAPE, bringing together hundreds of attendees.
Some questions related to internationalization process
Question: What advice would you give to companies that want to open new markets?
Auxadi: Local knowledge, preparation, partners who support this process, responsiveness, resilience and flexibility to adapt to the challenges that internationalization poses to organizations.
Q: Should the analysis of the potential and risk of a new market, before the start of expansion, be done internally, externally by a consultant, external supplier or a mixed formula?
Auxadi: Auxadi currently accompany more than 1,200 customers in their internationalization process. Our model of collaboration with these clients is based on becoming the international extension of their accounting department abroad. We do this by relying on our value proposition, our international presence (we have 22 international subsidiaries) and a network of partners who share our methodology, all through a single point of contact from our HUBs in Madrid, Miami and
Q: When moving towards a new territory or launching into a new market, how long should companies take to analyse the success of the operation?
Auxadi: Internationalization processes should be a natural extension of a company’s business and production strategy. It is true that opening a new market requires additional investment and that the first two or three years are the most critical, although it all depends on each company and sector. Most sources agree that, after the ten-year barrier, only a third of companies which initiated internationalization processes continue to develop their activity outside their borders.
But beyond that time barrier, it is essential to carry out the necessary analyses to determine whether that investment is successful in strategic terms; deciding, to cite two examples, whether investment in that market is beneficial in the future mix of an international presence, or whether it will allow continuity in other regions. In short: internationalization processes must be analysed in a strategic way, prioritizing the long term.
Q: What are common errors or errors to be avoided when entering a new market?
Auxadi: In processes as complex as internationalization, there are numerous errors that can be made. It is essential to know idiosyncrasies and local legislation, and that includes being very aware of key aspects such as taxation and labour regulations. We must not underestimate the complexity of the market in which we are going, because even in the European Union which aims to move towards regulatory harmonisation and is defined as a single market, there are big differences. For example, the recent incorporation in Spain of the European directive on hybrid asymmetry, which may have consequences for companies operating in different jurisdictions.
The positive thing is that, in the face of these challenges, there are equally numerous solutions or tools we can use. In any case, planning and advising by solvent professionals helps prevent errors. Sometimes cheap comes out expensive and rushing is not always good.
Q: How should the relocation of our industries be balanced with the current interruptions by the pandemic? And, moreover, when the bulk of global consumption in the future will be located in Asia and Emerging Countries…
Auxadi: If something has been taught to us by the pandemic, for example with the disruption we suffer with supply chains, it is that we live in an interconnected world, where trends and expectations can change easily. The debate on the need for re-industrialization has been reviewed in recent months so as not to be as exposed to situations as we experienced in 2020.
Each case requires detailed analysis and may lead to large investments where governments and public-private collaboration address issues under a country-wide strategy. The balance between short-term interests and long-term interests will require both courage and judgment, seeking strategic objectives and results, which must necessarily be expected in the long run.
Internationalization and investment abroad will again offer opportunities for growth and wealth generation.
Local Knowledge – International Coverage
Founded in 1979, Auxadi is a family-owned business working for multinational corporations, private equity funds and real estate funds. It’s the leading firm in international accounting, tax compliance and payroll services management connecting Europe and the Americas with the rest of the world, offering services in 50 countries. Its client list includes many of the top 100 PERE companies. Headquartered in Madrid, with offices in US and further 22 international subsidiaries, Auxadi serves 1,500+ SPVs across 50 jurisdictions.