Question

ACM is an electronics component manufacturer that has been located in Singapore since 1991, supplying original equipment manufacturers (OEMs) with quality components. In the past several years, ACM has experienced increasing pressure from other manufacturers located in other countries. In Singapore, while labor remains quite inexpensive, there has been a relatively steady increase in labor costs. In addition, utility costs—most notably water and energy costs—have led the firm to contemplate moving operations elsewhere in Asia in an attempt to make the firm more competitive. ACM remains profitable, but margins have shrunk, and management is interested in ensuring that the firm remains completive in the medium term to long term against other component manufacturers.

Discussion Questions
1. What advantages and disadvantages does each potential location offer?
2. What other relevant factors that are not mentioned in this case study might play a role in this decision?
3. Why is transportation infrastructure so important in this decision?
4. This is a long-term, strategic decision; what factors might change in the next 10 to 20 years? How will this influence the decision?
5. Which alternative would you recommend, under which circumstances?



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  • CreatedFebruary 12, 2014
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