ACM CASE STUDY 5
There are a number of advantages that are presented by the case withregards to the proposed relocations by the committee. Relocating toHong Kong in China would ensure that there is access to cheap andabundant labor. This is one of the problems that ACM has been dealingwith. Secondly, it is projected that numerous manufacturing firmswill be relocating to this location in the future years and this willensure that there is increased profits. There is available of seaportin Hong Kong which is essential for the distribution of products toclients in different geographical locations. The seaport will also becritical in the transportation of raw materials. Additionally, thecommittee has stated that the region has an extremely good transportinfrastructure, which will be essential in the transportation ofgoods and raw materials locally. Influx of manufacturers to theregion in coming years will pose the same challenge of competitionthat ACM is facing in Singapore. The initial cost of establishinganother firm in Hong Kong China will also attract huge capital andlogistical costs.
The other location which is Kuching, Malaysia has a number ofadvantages. The location has natural material necessary forproduction. Secondly, the location has stable and ready, cheap laborcoupled with sea transport and good infrastructure. The majordisadvantage of the location is the lack of frequent ships using thesea in the location. This may affect transportation of raw materialsand finished products.
Besides the points mentioned in the case with regard to the decisionthat they will make, there are other numerous factors to beconsidered by the committee before relocating to a new location. Thecapital of establishing a firm in the new location must beconsidered. Secondly, it is essential to consider the legalrequirements for establishing a business in the said location and orcountry. It is also essential to consider the cost of running thebusiness in the location and also the competitors present in thelocations.
It is clear from the case that majority of the customers to ACM’sproducts are from various geographical locations. This implies thatACM delivers its products to its clients overseas and also within thecountry of operation. This implies that the company must operate in aregion that has effective transport infrastructure. It is thereforeclear that the decision made by the committee must result in alocation that will offer transportation services. Transport of theraw materials and finished products require sea transport and road,as well as rail transport.
In the next 10 to 20 years, there will be various changes in thelocations that the committee is contemplating to relocating to. It isevident that there will be more advanced sea transport in the comingyears. Additionally, technology will have advanced and the managementof most of the operations will be done digitally. It is alsoessential to state that competition might be more severe in themanufacturing industry and ACM must enhance its operations.
Considering the case of ACM, it is tricky on the way forward for thecompany. It is clear that the Singapore government has agreed tooffer tax exempt for the next 5 years for the company to make sure itremains in the country. Additionally, the government has promised toassist the company in terms of subsidizing the labor, wages and watercosts. Besides this, it is clear that the Chinese location isextremely attractive. This is due to the seaport, infrastructure, andthe development forecasts in the region. It would therefore becommendable for the company to relocate to Hong Kong.
ACM case study. Attached word document.