Room to grow: business location, global expansion and resource deficits

Abstract

Purpose

Building a sustainable global business platform is increasingly a fundamental requirement for success in today's marketplace. What is less well understood by many companies is that international locations can bring with them concealed business establishment and mid‐ to long‐term operational risks that are specific and unique to each micro‐geography. This paper discusses some of the challenges and risks associated with the oversubscription of local resources.

Design/methodology/approach

The article discusses some of the issues a company is likely to encounter when establishing business operations in emerging markets. Observations and viewpoints have been derived from working in emerging markets and assisting companies select locations for business operations.

Findings

This article examines the hidden risks of international expansion. We find there are at three common challenges that are often encountered: labor market issues, land availability, and provision of utilities.

Originality/value

Executives charged with determining where to expand the company operations should be aware of the challenges associated with the over‐subscription of resources in emerging markets and plan accordingly. If you are not considering the issue of oversubscription of resources and are inflexible with project requirements, it is likely that the project will likely incur significant time delays identifying appropriate locations for operations, delays in the start‐up and challenges with long‐term sustainability of operations. In some cases, a lack of flexibility results in failure for the project.

Citation

Jackson, M., Houdard, F. and Highfield, M. (2008), "Room to grow: business location, global expansion and resource deficits", Journal of Business Strategy, Vol. 29 No. 1, pp. 34-39. https://doi.org/10.1108/02756660810845688