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What lies beneath? The hidden costs of rapid-growth markets - EY - South Africa

What lies beneath? The hidden costs of rapid-growth markets

About the report

This report is the latest in Ernst & Young’s The Master CFO Series and relates to the CFO’s role in relation to rapid-growth market entry, and the true costs of doing so. It is based on a survey of 921 CFOs from 59 countries globally, conducted with the Economist Intelligence Unit, as well as a program of in-depth interviews with leading CFOs and senior executives, including:

  • Stefan Asenkerschbaumer, Chief Financial Officer, Robert Bosch
  • Ron Bell, Chief Operating Officer, Actis
  • Peter Bracke, Vice-President and Chief Financial Officer, Honeywell Transportation Systems
  • Mikael Bratt, Senior Vice-President and Chief Financial Officer, the Volvo Group
  • Paul Brooks, Chief Financial Officer, Experian
  • Robin Freestone, Chief Financial Officer, Pearson
  • Deirdre Mahlan, Chief Financial Officer, Diageo
  • Pinak Maitra, Chief Financial Officer, Kipco Group
  • Pavel Mitrofanov, Deputy Chief Executive Officer and Chief Financial Officer, Metalloinvest
  • Paul O’Flaherty, Finance Director, Eskom Holdings
  • Frédéric Puistienne, Chief Financial Officer, Adisseo

Where others see primarily opportunity, the CFO must be able to spot complexity – the costs both manifest and hidden.

The opportunities in rapid-growth markets are undeniable.
So are the potential risks and the likelihood that budget overruns can temper growth prospects. Over one third of CFOs underestimate the costs, and 4 out of 10 the time, involved in entering these markets where even the smallest miscalculation can erode profitability.

The opportunities in rapid-growth markets are undeniable. So are the potential risks and the likelihood that budget overruns can temper growth prospects. Over one third of CFOs underestimate the costs, and 4 out of 10 the time, involved in entering these markets where even the smallest miscalculation can erode profitability.

Many African markets qualify as “rapid growth”: according to research done by the Economist, six African countries have been among the ten fastest growing economies in the world over the past decade; and seven African countries are forecast to be among the ten fastest growing economies over the next five years. As our recent Africa Attractiveness Survey demonstrates, this widespread growth is driving significant interest from international investors.

The insights from the EY global report: The hidden costs of entering rapid-growth markets are directly relevant to companies and their CFOs looking to expand into and across Africa.

Find out more about our complete report detailing the six hidden costs of investing in rapid growth markets and the CFO’s role in finding the right balance between accelerator and brake.

Click here to read the report
What lies beneath: The hidden costs of rapid growth markets

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