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Defying the recession through international expansion

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Many are battening down the hatches and focusing on protecting their current operations, mindful that international expansion is a huge challenge to undertake during the best of times.   

Yet for those companies that are willing to do their research, the recession should not represent a barrier to their expansion ambitions but rather an opportunity. By increasing their exposure to markets outside the UK, they may find a greater level of protection during uncertain economic times, while the innovation and productivity gains to be made through international expansion can also help companies withstand the challenges of the global downturn.  The US market continues to offer a wealth of opportunity for those companies that get it right. In recent years, many US states have become highly sophisticated and fiercely competitive in their efforts to promote their own economic development by attracting foreign direct investment.

The state of Georgia, for example, prides itself on a pro-business environment including low operating costs and a wide variety of incentives for creating new jobs in the state. Georgia is home to some of the world’s leading research universities and an abundance of talent, encouraging more than 350 British companies such as JCB and Reckitt Benckiser to select Georgia as their gateway to the US market in recent years.  However, while the US. wholeheartedly welcomes foreign investment, thorough research and preparation are essential for a successful transition. The shared language and similar business culture encourage a sense of familiarity, yet there are many complex issues to consider and therefore advice and guidance should be sought as early as possible.

Companies targeting expansion in the US market should ensure, now more than ever, that they are sufficiently funded, that their existing business operations are absolutely solid and that they have researched their choice of location carefully. Although historically the main points of reference for UK companies have been New York, California and Chicago, the Southeast is growing at a phenomenal rate and states such as Georgia are noted for their economic benefits and political stability.  The diverse nature and sheer scale of the US market means that businesses must also plan a measured approach to expanding their customer base – UK companies that target one region at a time are able to fully appreciate the complexities of each and adjust their operations accordingly. Any temptation to overreach should be tempered by the knowledge that just one region of the US can have more sales potential than the entire home market. US expansion is an undeniably challenging undertaking, and some companies are right to delay their international expansion plans in the face of economic uncertainty. However, those companies whose businesses remain strong and who are painstaking in their preparation will find they will reap the rewards despite the downturn.*Mike Harling is director of the State of Georgia’s UK & Ireland office. For more information, please visit www.georgia-global.org or contact Mike Harling on +44 (0)1672 851 619 or harling@georgia-europe.org

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