Whether it’s the allure of bringing your unique product to an emerging market, or tapping into a free-trade zone in a geographically convenient location, bringing your company to the global stage is an intriguing prospect.
Taking the time to properly vet political stability, infrastructure and labor conditions, and travel security for one or more potential countries means asking and answering the right questions; questions that will inform your decision making process.
Here are just a few of the questions that are important to ask when making a global evaluation.
Evaluating Political Stability
When comparing countries, one of the most fundamental questions to consider is political stability. Stability allows you to focus on your core business without having to monitor factors outside of your control; instability means devoting mental bandwidth to monitoring sources of uncertainty that could impact nearly every aspect of your business. Accordingly, it’s important to start by examining the status of the current government. Is it popular? Unpopular? Was its election considered legitimate?
These questions can lead into a deeper analysis of the intersection between politics and economics. In this vein, it’s important to ask the following:
- What is the country’s history with FDI?
- Are key institutions in place to support your company’s expansion, and how do they compare globally?
- What is the likelihood of a political upheaval ushering in a new government that changes the conditions of which you’re accustomed to doing business?
Evaluating Infrastructure and Labor Conditions
When deciding between two or more countries, infrastructure is one of the most critical components to evaluate. Poor infrastructure doesn’t necessarily disqualify a given country, but you need to know what your dealing with to avoid frustration and costly delays. Start with the basic question: does the country have the ports, roads, and infrastructure to support your shipping needs safely and quickly? What are the conditions of these vital infrastructure? Are there environmental concerns such as a heightened risk of natural disasters that could disrupt your operations?
Moreover, if you’re planning on operating in a given country, it’s likely that you’ll be hiring local talent. As such, understanding local conditions is also critical to deciding which country best suits your needs. Consider the following:
- How skilled and/or educated is the local workforce?
- How do trade unions function and how could employment laws impact your workforce?
- Are there any employment laws directly related to foreign firms operating in-country?
Evaluating Travel Security
In-person travel presents the best opportunity for your company to investigate in-country conditions; however, it also presents the most volatile and potentially dangerous risk to your company. When deciding between countries, it’s important to look at the past history of security incidents. Is there a heightened risk of a security incident? Are there any anniversaries or upcoming events that increase the chance of a fresh incident?
More parochially, the basic ins-and-outs of travel should be well understood:
- What are the visa requirements for my country?
- How likely are transportation disruptions to occur due to strikes or other conditions?
- What are the major holidays that could disrupt business?
Asking the above questions takes time and resources, but is well worth the effort when making a decision with global ramifications for your company.