Multinational corporations need to identify the areas where they can generate higher growth within their Europe businesses, proactively prepare for risk in the UK, and approach strategically their Russia’s operations. Europe is the region where MNCs cannot afford not to succeed, particularly in a year when the macroeconomic environment is favorable for companies, and given pressures on profitability and growth in the Middle East and challenges in getting to scale in Sub-Saharan Africa.
While we see solid performance coming out of Western Europe, with the region expected to grow by 1.9% YOY in 2018, many of our clients are looking for opportunities to get ahead of competitors by identifying pockets of opportunity in the region, for example in specific segments Spain, Italy, and France. It is critical to ensure that local teams are not just riding stronger growth, but are proactively adding value to customers and finding new segments to target as price sensitivity remains an issue.
In addition, almost half of clients we have polled recently do not yet have completed Brexit plans despite the growing time sensitivity for preparing and protecting businesses from the impact of Brexit. Given pressures
on profitability in other parts of EMEA and the important contribution that Western Europe makes to businesses’ total commercial performance, it is critical to ensure the UK does not derail your plans as it would be hard to find areas to compensate for it in EMEA’s emerging geographies.
Finally, now that elections in Russia are over, we expect changes in the tax structure and government plans to help fund Putin’s pre-election promises. At the same time, we see many companies placing significant expectations on their Russia’s businesses without providing the local teams with the infrastructure to deliver on those, creating potential risk in another major piece of companies’ Europe portfolios.
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