M-factors - Determining the location of a Global HQ

M-factors - Determining the location of a Global HQ
(CopyRight 2008; Benjamin Goh, www.bensglobal.com)

M for Man. It is most important to be able to employ the best in the industry where the company is in. Human resource is one of the key assets of a company and the importance is paramount. The appropriate market knowledge, domestic and/or international, where applicable, is key to successful business and market development strategies.

M for Machine. Where machines or systems are essential to the function of the headquarters (HQ), it is important to ensure that quick and adequate support is available readily. Further, the further away the support team is located from the company, the higher the cost of support and the higher the risk of higher downtime when the machine(s) fail.

M for Materials. Readily available materials needed for the operations are key to maintaining a cost advantage over the competitors. If materials are not located overseas, it will imply additional cost in freight, custom duties, trade restrictions, etc.

M for Methods or technology. Is the key technology available in this location? For example, the proximity of research centers or higher institute of learning (HIL) where the technology is most prevailing would be a competitive advantage. This will ensure the ease of accessing the latest technological breakthroughs as well as the availability of the adequate research and development resources.

M for Markets or geography. The proximity to the key markets of the business is critical. This allows HQ resources to have better access to market requirements and shorter time (thus lower cost) to reach the key markets.

M for Money or financial. If all being right, one very important factor to note when deciding on the location of the HQ is government regulations, fiscal legislation, tax incentives, government funding, etc., that will be highly beneficial for the function of a HQ in that country or state. There are many develop or developing economies that offers many government funding and tax incentives for companies setting up global HQs.