Geographical footprint: 3 main trends for the post pandemic times

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Every business has a geographical footprint. Every business has also been affected by the pandemic. However, as time passes, the pandemic will probably come to an end and it is an important time for companies to decide which way forward. There are several aspects that can be said about the future of businesses. Let’s take a look at them.

Geographical footprint

Deciding on the geographic footprint of a business is crucial for any executive. The entry into a foreign market and the location of a manufacturing company is a very crucial thing for the enterprise as a whole. Not all executives get these things right, so for many businesses it can be a short lived decision. However, even if these aspects were chosen correctly, the pandemic hit and businesses had to make quick decisions on how to deal with the new environment.

1. A strong focus on the home region

Even before the pandemic, many businesses and companies already had a strong home region orientation. For example, in 2002, 88% of companies generated at least 50% of their revenues in their home region. This figure has been rising – 69% in 2013 and even 74% in 2017. It is therefore possible that companies will continue to be domestically oriented and that this trend will increase after the pandemic. People are aware of the dependence on imports, which has become fatal for many industries during the pandemic. Many businesses are more likely to be attracted to the domestic environment.

2. Going global is not for everyone

Many companies that are global now were not global before the pandemic. They owe much of this to their use of digital platforms. So it is quite possible that true global expansion will be an option for very few companies. It will be mainly those companies that have fully exploited their potential in digital growth. The geographical footprint of many companies will therefore remain more at home.

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3. Digital technologies

Digital technologies were already very important before the pandemic. But the truth is that the pandemic accelerated this development as digitalisation continued to enable globalisation, access to information and connectivity. However, a focus on e-commerce alone is unlikely to be enough. How companies deploy other digital capabilities – from manufacturing to distribution – will be important in the next step. If companies want to truly remain global, this will be a major issue for them to address.

Source: sloanreview.mit.edu

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