Question 1: What criteria would you use to select the site for Intel’s plant in 2005? Why?
From my point of view, one of the most important criteria which Intel should consider is the cost factor. Intel should choose a location with low cost of operations especially low labour cost. Thus, the company would decrease its costs and increase its profits and its free play when setting the price.
Furthermore, Intel should look for a location which offers many opportunities to do business internationally. As a consequence, it will be easier for the company to expand its market and to gain many other business partners all over the world.
Another important point is the supply of resources. If the supply of resources in the selected location is insufficient the company has to expect a loss of profit. Closely related to the supply of resources Intel should locate its new plant in a country with low cost of import and export and a good infrastructure. Both points are important for the transport of missing items for example.
Moreover, the company should bear in mind that factories of competitors which are located near the chosen location might limit the possibilities to fix advantageous contracts with suppliers.
In addition, Intel should choose a location where the employees meet the required expectations concerning qualification and skills. Thus, Intel would save additional costs concerning staff training.
Another important point, is the political stability of the country. Corruption, problems with laws concerning the protection of intellectual property etc. might endanger the success of the whole company.
Furthermore, security and environmental conditions play an important role as well. The risk of natural disaster which could lead to the destruction of the whole plant and thus, to huge losses of the company should be drawn into consideration.
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