Corporate location: organizational and real estate considerations

Expanding business requires having the necessary insights to efficiently select a suitable location. The issue has gained strategic importance because of the number of factors that may impact the business, from the future business organization and tax rates, to the availability of government incentives and the size and significance of the market. The failure to recognize the impact of these factors could create unexpected fluctuations in cost predictions for the business.

"Luck is being in the right place at the right time, but location and timing are to some extent under our control."

Natasha Josefowitz,
author and poet

Location decisions are part of the business strategy. This can be seen in specific examples such as retail and logistic business units. Broadly speaking, corporate location decisions are based on a variety of criteria from personal to corporate, living standards and geographical considerations.

This article is based on a case study of an organization that developed a set of unique location criteria for identifying and selecting a specific location. The organization was faced with two challenges: to integrate its subsidiary operations with the aim of creating a new operational structure; and to determine a future location for the combined business.

It developed three alternatives for future location and three organizational models for the combined business. Location alternatives were evaluated and compared primarily for their benefits and economic feasibility. A weighted measure of various individual considerations was formulated using the site, real estate and organization and scores assigned to each of these factors. An economic feasibility study was performed based on the ranks and the results were compared. The study also charts specific advantages of the selected location when compared to other alternatives. The benefits of a comprehensive business strategy to locate specific locations are highlighted throughout.

The complete article was written by:

  • Michael Janetschek
    Partner, Ernst & Young Real Estate GmbH, Germany
  • Iris Neundorf-Iida
    Manager in the Advisory Practice, Ernst & Young, Austria
  • Marcus Gottlieb
    Advisor in the Advisory Practice, Ernst & Young, Austria

Download the full article pdf (pdf, 520 kb)

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