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IBM Global Business Services

© Copyright IBM Corporation 2008

Investor’s CafeInvestor-driven marketing of your location

October 8th 2008

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PLI – Global Location Strategies

IBM - PLI (Plant Location International) A global IBM service offering

PLI – Global Location Strategies ( aka as IBM-PLI) is a global service offering within IBM Global Business Services (and previously PwC Consulting) exclusively specialized in global location strategies

Our area of expertise focuses on analyzing international business locations for expanding or consolidating companies to select the optimal location (country/region/community/property) against best shareholder value

IBM-PLI is independent from government authorities or other organizations with local interests and fully objective and unbiased in its advice; no conflicts with real estate, tax, incentives or other interests

Unique, unrivalled experience as dedicated corporate investment strategy and location consultant:- Over 45 years active in this consulting area; over 2,000 corporate projects conducted- Multinational, multi-cultural and multilingual team of location experts in key practices for EMEA,

Americas, and Asia-Pacific; local satellites and representatives in key markets- Functional, regional and industry specialists within IBM in major locations around the world

Experience with all types of facilities: manufacturing, distribution, shared services, R&D, call centers, data centers, headquarters, etc.

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Key practices for Global Location Strategies

R&D Center for Economic Development

Global hub

Local satellites

Global Delivery

Americas AsiaEMEA

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1. Corporate Location Strategies• Analyzing international business locations for expanding or consolidating

companies to select the optimal location (country/region/property) against best shareholder value

• From global location strategy definition and country/region screening to local community analysis, site selection and incentive negotiations

• Network of local subject matter experts available for implementation support

2. Inward Investment and Economic Development Strategies

• Performance improvement by analyzing competitive position, defining marketing strategies, organizational strengthening, product improvement, development of innovative marketing tools, investment promotion training, etc.

• All services based on our unique insight in the investor’s perspective

• Network of local experts available in most countries/regions around the world

Key services

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The global market for foreign investment is large

Companies are looking more widely for opportunities

More countries position themselves as potential locations for companies, creating a more competitive market for foreign investment

This market is demand, not supply, driven (the investor decides where to locate)

Need to understand your location’s strengths and weaknesses in the competitive market place, from an investor’s perspective!

Need to market your proposition to investors (again keeping the investor’s perspective in mind)

Introduction

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Typical corporate location selection process

1. Define Project Assumptions and Long List of Location Options


2. Analyze Long-list of Candidate Locations Identify Shortlist


4. Site Search & NegotiationsSelect Preferred sites and

start negotiations


start negotiations

5. Implementation5. Implementation

3. Evaluate Short-listed Locations Select Preferred Location


De-select less attractive locations: In theory, many location options High level, quick analysis No field visits; desk research only Focus on key cost & quality drivers Input for high level business case Shortlist of best candidate locations

Select best location solution: Detailed analysis of many factors Forward looking projections Assess local market dynamics and

implementation risks Validate right skills availability Field visits: interviews & negotiations Few locations only (short list) Detailed and validated input for final

business case Preferred city (+ back up)

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start negotiations


start negotiations

5. Implementation5. Implementation



Location factors vary throughout the selection process, depending on objective of different steps

Macro

Stability/riskMarketCosts

Workforce/SkillsInfrastructure

Costs

Real EstateIncentives

Quality of Life

Micro

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Re-active Marketing

Marketing involvement

1. Define Project Assumptions andLong-list of Location Options


4. Site Search & Negotiations

5. Implementation

3. Evaluate Short-listed Locations

Select Preferred Location

After-Care Support

Information Supply on Key Issues

Detailed information Supply (Quotations)Organization & Support in Fact-Finding Trips

Support in Negotiations

Location decision process

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Re-active = act in response to enquiries from investors

Advantages:

Enquiries are from seriously interested companies, that have pre-selected your location

Potential for winning the investment project is realistic

Disadvantages:

You probably will miss enquiries from investors that have not pre-selected you but for which your location offers strong opportunities

Investment promotion does not contribute to economic development strategy with a focus on stimulating inward investment in specific industries

Pros and cons of re-active marketing

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Corporate location decision process Location marketing process

1. Product Definition

2. Target Group Selection

4. Site Proposal + Information

5. After-CareSupport

3. Identification of Potential Investors Company Targeting



5. Implementation

Pro-active Marketing


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Pros and cons of Pro-active Marketing

Pro-active = actively try to identify investment prospects before enquiries are generated

Advantages:

Investment promotion strongly contributes to economic development strategy by stimulating inward investment in specific industries

Chances of winning projects by being first IPA to discuss project

Disadvantages:

Requires more and dedicated resources

Requires greater sector-specific and commercial understanding

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After Care

IPA involvement




5. Implementation

3. Evaluate Short-listed Locations

Select Preferred Location

After-Care Support

Information Supply on Key Issues

Detailed information Supply (Quotations)Organization & Support in Fact-Finding Trips

Support in Negotiations

Location decision process

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Experience from many regions around the world shows that 70-80% of investment relates to already established base of investors

After care is a dedicated service to assist investors after investment implementation

The service offers strong marketing opportunities as well, with a focus on:- Supporting re-investment- Increasing the value of investment to the host country- Helping to ‘embed’ companies more strongly in the area- Generating new leads

After care

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Have you identified your target sectors (is this based on actual strengths or aspirations)?

Are you tailoring your marketing to your target sectors?

Are you mainly pro-actively or re-actively marketing your location?

What involvement does the private sector (investors) have in your marketing efforts?

Questions for your marketing strategy

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