The Allure and the Oversimplification of U.S. Market Entry
For many foreign companies, entering the United States represents the pinnacle of international growth. The market’s scale, consumer diversity, and innovation ecosystem are irresistible. I wrote about this in a prior article — amid the reality of tariff hikes, fractured diplomacy, and shifting policies: one message remains clear: the United States remains open — and strategically positioned — for foreign direct investment. You can read about my thoughts on U.S. investment as well as U.S. companies going global in my prior articles: In a Fractured Global Landscape, America Still Welcomes Investment and Why U.S. Companies Should Diversify Overseas Amid Rising Visa Fees & Tariffs.
The Site Selection Obsession: Why It Happens
What I am focusing on is why site selection alone is an incomplete strategy. Site selection receives disproportionate attention because it’s tangible — you can map it, measure it, and model it. But while it’s a foundation, it’s far from the full structure.
Choosing the right state or city is undeniably vital. It affects cost structure, logistics, workforce availability, and access to incentives. However, treating site selection as the centerpiece of expansion — rather than one component of a broader framework — is a strategic misstep.
What works in Boston may fail in Houston. The diversity that powers the U.S. economy also complicates foreign market entry.
The True Importance of Site Selection
Site selection does matter enormously. A poor choice can create logistical nightmares or limit access to customers. Regions like Georgia, Texas, and Ohio have become magnets for manufacturers because of infrastructure and workforce skills. On the other hand, new entrants need to also analyze whether these regions have the capacity to continue to handle an influx of new companies that use the same resources, whether its water, power, road, real estate, etc. In other words, deeper analysis requires review of past data as well as assistance in predictive modeling and following the ever-changing local regulatory framework.
The Limitations of a Location-First Strategy
The U.S. legal environment is layered. Foreign firms often underestimate how decentralized compliance is. Over-centralized decision-making and cultural blind spots often undermine otherwise sound business plans. For economic development organizations that may read this article, how often do you hear from foreign companies that all decisions have to be done in headquarters, thousands of miles away, and in different time zones… City and county regulations are markedly different. To assume because the foreign entrant may have a sales office in California, that they would have a depth of knowledge of business operations in, say Memphis, is to be misinformed.
Beyond the Map: Building a Holistic U.S. Market Entry Strategy
Site feasibility should integrate financial modeling, compliance readiness, location expertise, legal, brand strategy, and community impact — not exist in isolation. Early collaboration with local governments, legal advisors, and PR specialists prevents friction. I am also a big believer that while books of data are important, it’s equally important to understand how the prior data can potentially evolve and thereby impact forward projections.
While I believe reasonable minds may differ, in my opinion building a market entry playbook must include:
- Site Selection.
- Legal and Regulatory Review.
- Organizational Structuring and Leadership Alignment.
- Local Awareness and Community Engagement.
- Continuous Margin and Operations Analysis.
Conclusion: Success Lies in Synthesis, Not Silos
Site selection is the starting point — not the finish line. Success depends on how well operational, regulatory, cultural, and human elements are synchronized. Companies must think holistically, plan interdisciplinarity, and act locally.
I thought it would be helpful to bullet my thoughts below:
- The biggest mistake is overemphasizing criticality in site selection.
- State business cultures vary widely.
- Hybrid leadership structures work best.
- Local governments are key partners.
- Local community outreach is important. It is not uncommon for neighborhood associations to take completely opposite positions from legislators on something that would create noise, traffic disruption and possible strains on local water and power.
- Balance global standards with local adaptation.
- Data given is already old-sometimes by months. Focusing on prior data but analyze emerging trends, such as what is on the legislative docket for zoning.
- Site selection remains critical, but only as part of a larger framework.
About the author
Gary Sumihiro is a board member of EDGE Partners LLC, focused on assisting companies to enter the U.S. as well as go global. Gary is also the founder of Sumihiro Investments LLC, a global strategic advisory firm.For more information about Sumihiro Investments and EDGE Partners see the linked article.