Five considerations for selecting the right location for international expansion

For many agencies, there has never been a better time to consider international expansion. With the UK locked in a prolonged period of economic stagnation and political uncertainty, broader horizons not only offer a sensible commercial hedge but also a welcome opportunity to deliver the growth that is hard to achieve here currently.

The theory may appeal but the real challenge lies in the practicalities of choosing the right location, with so many options for any communications business serving global clients with transferable expertise. 

That location has to be right today but also in the future, offering long term growth opportunities for people and clients; that’s no simple equation and requires plenty of research, as well as a clear vision for how your agency will thrive in its new home. So, what are the key considerations when choosing the location?

1. Local market opportunity

A new office should always be seen as a driver for long-term growth, so identifying a gap in the local market is essential. It’s important to see evidence of investment in sectors where you have expertise and aim to win business, as well as tracking the success of competitors over a sustained period to corroborate demand broadly, but if you can go one step further and identify a specific gap in the market, then you may be on to a winner. When we chose to launch our first international office in Boston, we did so with specific digital services, rather than the full range of our group’s expertise, because we felt there was space in the city for this focused expertise and it would provide a strong platform for expansion in the future. Time will tell if the plan works but sometimes it’s better to be bold and offer a smaller range of highly expert services rather than competing on all fronts from day one.

2. Integration

The success of an international office can be measured by how seamlessly it works with the rest of the organisation and there are some practical considerations that will set you up for success. Are the time zones conducive to proper collaboration without huge adjustments on both sides? Are travel times between international offices manageable, or will they discourage face to face meetings, which are critical to breeding partnership and infusing culture? On a basic level, is the new location somewhere that your people and clients will want to spend time and will they be excited at the prospect of doing so? It’s an important consideration and one informed by knowledge of the local culture, lifestyle, politics and even climate; finding a gap in the market may be critical but if that gap exists in a location which ticks none of the boxes above, then integration will be a challenge from day one and you may never realise the true potential of an international opening.

3. Talent pool

This is a fantastic opportunity to broaden the agency’s talent pool and find people who you would never have known existed but can be responsible for future growth and success. That’s how critical it is to consider the depth of local talent, researching colleges and universities, people working for established local competitors, freelancers and potential partners. Ultimately, the new office is only going to be as good as the people you hire to run it, so the quality and potential has to be there and the location should be somewhere that is attracting the very best talent, rather than losing it to competing cities.

4. Business community

As well as the people, it’s important to consider the wider business community. Ask yourself, is this a place where it is possible to scale and grow? Is it somewhere business leaders support each other, invest in networking and partnerships, with strong local chambers of commerce and industry groups? Are members of the community willing to meet when you visit to research the location, share their experience and insight? If so, you will find the new office becomes established quickly and feeds off strong connections. Aside from support groups and the spirit of collaboration, other aspects of the local business landscape to consider are the level of investment and funding flowing into businesses, as compared with other cities, and also the presence of non-competing organisations in complementary fields, who have potential to become long term partners. This is a vital point – in fact, we have appointed a director to oversee partnerships in Boston and beyond, in the knowledge that this will be an essential source of future income.

5. What comes next?

For an international office to offer the maximum possible value, it will play into your wider business plan and take you one step closer to the next major milestone – whether that be another office opening, a new service line, M&A activity or something different, it should make what follows easier to achieve. So, as well as longevity in the chosen market and talent pool, you should ask how the new location can contribute to achieving key business goals over the next two to three years and, in doing so, you will identify opportunities for integration and fresh ideas that play into the wider growth masterplan.

Stuart Skinner is group managing director at The PHA Group, which recently announced its first international agency with the launch of Dig & Dig in Boston, Massachusetts.