Resources

1. Resources • Starter questions • Location factors recap sheet • Thomson Reuters case study • Homework: Dell

2. H/W outstanding • Economies of scale • Alex, Russell, and Lara • Scale and resource mix • Lara, Alex • AstraZeneca (innovation) • Lean Prodn Kaizen and JIT • Alex • Location • Alysha – end of today • Alex –lunchtime pickup for sheets • Russell- economies of scale sheet

3. Guess the factor of location You use me every day You have used me to get to college I am always available, but I can be very busy businesses need my help to deliver products and customers I am TRANSPORT

4. Guess the factor of location I am determined by supply and demand The more customers in my area the more expensive I become You can rent me if you want but you can also have me for yourself I am COST OF LAND or PREMISES

5. Guess the factor of location I came along and changed everything Now businesses and customers operate more and more through me Who needs a location when you have me on your side I am INFORMATION TECHNOLOGY

6. Guess the factor of location I am a factor of production I am a factor of location that has two parts. I am concerned with money and expertise I am a vital part of any company and it cannot function without me I am LABOUR

7. Guess the factor of location I rule the land and may help you to locate I can offer you money but only if you do what I say I am a Government GRANT

8. Guess the factor of location I am a tax you pay to the local area If you locate in certain areas you will have me to deal with I can be quite expensive and the rate will vary I am a BUSINESS RATE

9. Guess the factor of location I am a part of many businesses I am not the future of the business but the opposite Locating near your raw materials would help describe me I am HISTORY and TRADITION

10. Guess the factor of location I am difficult to define precisely I am a matter of personal opinion and choice I influence your decision about the type of life you want to have I am QUALITY OF LIFE or LIFESTYLE

11. Guess the factor of location You should locate where there is plenty of us The more of us the better We pay your bills We are CUSTOMERS

12. Guess the factor of location I balance all the factors of location I ensure that the company minimises its costs I am the LEAST COST SITE

13. Operational Strategies: Location

14. Lesson objectives • Recap on key factors when choosing a location • Apply 2 methods of making location decisions • Analyse the advantages and disadvantages of multi-site locations

15. Recap • Now prioritise those factors according to which is most important to the business

16. Technology: e.g. teleworking: working in a location that is separate from a central workplace using telecommunications technology…Quaternary sector Cost of factors of production: e.g. more businesses are relocating their manufacturing to emerging economies, such as Russia and China Infrastructure: For emerging economies in particular, the local infrastructure can pose difficulties • Government • incentives: • e.g. grants to assisted areas, subsidies Qualitative factors: Based on the opinions and wishes of individuals rather than on quantifiable data. e.g. convenience, quality of life, “industrial inertia” Markets: e.g. services sector, JIT Factors of Location CELL!

17. Investment Appraisal: 3 principal methods Payback ARR Average rate of return How long will it take the company to pay back the loan? % return on your investment which you can use to compare different strategies Investment Appraisal methods NPV Net Present Value Future return put into today’s values

18. Case Study: Thomson Reuters • What are the main factors of location TR has to consider? • What numbers would it use if it took an investment appraisal approach to deciding where to locate? • Where might it locate key parts of its business? • Work out a rough idea of how you think it has structured its locations. 15 mins

19. Case Study: Thomson Reuters • Global information company serving financial, legal, tax and accounting, healthcare, science and media (news, TV, Internet) markets • Heavily technology based • Prides itself on gathering information at source and delivering it to decision makers anywhere in the world in milliseconds. • Over 55,000 employees in more than 100 countries • Staff: Software engineers and technologists, information experts in every field (lawyers, tax accountants etc.), business managers, marketing and communications professionals • 2009 Revenues: US $12.9 Billion • Revenues by Geography: • Americas: 59% • EMEA: 30% (Europe, Middle East and Africa) • Asia: 11% • 58% of revenues generated from the Financial Sector • Needs to recruit well educated individuals for software development and information • Needs to keep salaries under control

20. Case Study: Thomson Reuters Serving non-Financial Markets Serving Financial Markets

21. Case Study: Thomson Reuters • HQ New York • London • Toronto • Bangalore • Beijing • Gdynia, Poland • Eagan, MN • Geneva • Zug • Lots of 2-3 man journalists’ offices Customers Where companies outsource business activities overseas, largely because labour and facility costs are much cheaper there Qualitative Offshoring Acquisition Tax Operational imperative

22. Case Study: Thomson Reuters • Strategic objectives • Profit (!) • Deliver the world’s most comprehensive information service to the financial, legal, tax and accounting, healthcare, science and media markets • Be as close to customers as possible to provide excellent customer service • Source the best possible talent from anywhere in the world • Keep costs under control

23. Case Study: Thomson Reuters • Location factors • Multiple: • Global markets, • Tax, • Cost control, • Specialisation, • Operational imperative • In short running a multi-site location across the world to try to deliver the best service at the cheapest cost to maximise profit margin

24. Assessment • Thursday Oct 21! • Operational Strategies • Collect h/w sheets from S1 office on Monday

25. Homework Answer the 3 questions on Dell’s relocation from Ireland to Poland.