In May, we launched the fDi Atlas (http://fdiatlas.fdimagazine.com/), an online search and reference tool that provides detailed investment information on locations for corporate executives and professional advisers involved in cross-border expansion decisions. A fully searchable and clickable interactive mapping system is designed to allow quick and easy access to information and contact details for potential investment destinations.
Picking out a place on the map is only the very beginning of a greenfield location decision, of course (this decision itself typically having followed much discussion and debate over whether the next stage in company expansion should come through a merger or acquisition, joint venture, greenfield or some other means of market entry). What entails is usually a long and lengthy process of weighing the merits of various countries, regions, cities and then specific sites. Some companies are more thorough with this analysis than others, and the methods vary widely.
But as I heard from a roomful of European finance chiefs recently when I chaired a panel on cross-border expansion at the CFO Strategies forum in Monaco, it is nearly impossible to tell how well (or not) an investment decision is going to work for the company until the new facility is up and running – in other words, until it is too late.
Certainly, due diligence at the outset of an investment can prevent an awful lot of headaches later on – but not all of them. And every location, regardless of how many advantages it offers, will always have its downsides and present a host of challenges, many of them previously unforeseen. This is particularly true for the frontier locations, where intrepid inward investors can maximise cost savings and discover untapped talent pools – but are also the first to discover why costs are so low and why there are so few other investors around.
Ultimately, what makes for successful international business expansion is not so much astute location selection but adaptability, agility and good old-fashioned problem-solving.