What should companies consider when choosing a global location for doing business?What should companies consider when choosing a global location for doing business?
In addition to the above-mentioned, companies should consider access to transportation infrastructure in diverse forms when choosing a global location for doing business. This includes ports, shipping routes, rail access, truck routes, air cargo terminals and the like. This is necessary for getting required materials for their manufacturing processes as well as for shipping finished product to different regions.
A company should also consider the proximity of the chosen location to suitable training facilities for the employees they will hire at the location. Will new hires require specialized computer or other training through an academic institution such as a university or college to be a good fit for the company's positions? If so, a company would want to be near quality education infrastructure, if they will not be handling specialized training in-house.
Multi-national corporations must consider a number of things when chosing a location. Some of them include:
- Labor costs
- The skills of the labor force that will be available to them. It is no use going to a place with cheap labor if the workers cannot do the job that is needed.
- Presence or absence of certain types of infrastructure that are needed.
- Shipping costs to markets and from sources of raw materials.
- Political risk. It is important to know the political climate in countries that are under consideration. It is not, for example, a good idea to invest in a country where the government might confiscate your property and destroy your investment.
More subtle than the issues of political instability mentioned above, but still an issue, would be the types of taxes and regulations (environmental, workplace, hiring practices, etc.) that a corporation might be subject to if it relocated to a country. These factors are directly related to operating costs and the profitability of relocation.
When thinking about going abroad with your company you would want to go to that country first and pay attention to their culture, religion, and how other companies are doing in that region. You would also want to consider the expense of relocating, hiring and training of help and then how the economy is and if your product will sell from this country. Also consider the expense of shipping your product back to the U.S to be sold to stores. Pay attention to how easy it will be to get your materials to make product.