Location expansion is a game of long-term strategy

01/10/2012 | HBS Working Knowledge

Expanding a business is like playing chess instead of checkers: Long-term strategy is necessary, writes Dina Gerdeman. The mistake many businesses make is expanding only into areas with cheaper labor or facility costs. Instead, expansion should be based on a thorough understanding of a location's available resources and of what the competition is doing, as well as an assessment of how expansion fits into a long-term strategy. "Companies often blindly follow their rivals from city to city or country to country without analyzing whether that same situation is right for them," Gerdeman writes.

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