Business strategy is the theme of this third in a series of quarterly surveys of midcap companies for the Financial Post under Roynat sponsorship. We look at growth strategies, growth motivators, financing strategies, and key worries.

The key findings are as follows:

• Seeking to develop and build market share is by far the most important of nine possible strategic growth options, far ahead of M&A, going abroad, strategic collaboration, and other options;
  
• Retained earnings are the first source of capital used by Midcaps to finance growth, followed by personal investments— retained earnings have potentially significant drawbacks, according to business leaders, including impeding cash flow thereby limiting growth and reducing profit to shareholders;
  
• The thirst for growth is driven above all by a desire for profit—the goal of heightened morale is not a major motivator;
  
• Midcaps’ greatest concerns or worries relate to finding good staff and management and treating customers well - finding capital and dealing with government are lesser concerns.
  
  

A total of n=300 CEOs or equivalents of mid-cap firms (i.e. sales of $10-$100 million) were surveyed in August 2004 by professional interviewers using CATI (telephone). Samples of this size are deemed accurate to within 5.7 percentage points 19 times out of 20.

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