Dealing with financial, logistical, cultural & political issues
Globalization is a fact of life – one that can spark a business expansion, consolidation or relocation.
The cost of running a business in the United States has increased for a number of reasons, the most recent of which are new health care requirements. Other difficulties include new regulations (particularly in business-hostile states like California) on everything from making it easier to be sued by employees over frivolous claims to penalties on electric and natural gas utilities and water usage, all of which increase costs.
In some poorly run states and communities, the prospect for higher business taxes is so real that company leaders feel that they are forced to look for alternative locations if they are to remain competitive. Sometimes those sites are in other countries.
It’s a different story for overseas corporations in the consumer products business because the market in the United States is enormous. Establishing a presence here is likely to be a requirement if a company wants to boost its prospects of success in North America.
Location “hotspots” and available economic incentives may change from time to time. And it is a challenge to optimize investments when working with unfamiliar national or provincial governmental authorities. Such variables are true regardless of whether a project is called onshoring, offshoring or nearshoring.
Despite nationalistic tendencies, companies boost their competitiveness by finding international locations that offer the appropriate talent, an attractive cost structure, and reasonable risks. If assessments are done properly, businesses find optimum locations that allow quality to be maintained while improving productivity and marketability.
On international projects, Joe Vranich teams with site selection experts who for many years have evaluated potential projects worldwide for all sorts of industries.