1. deeper IBM Global Business Services © Copyright IBM Corporation 2008 Investor’s Cafe Investor-driven marketing of your location October 8 th 2008

2. IBM Global Business Services © Copyright IBM Corporation 2008 PLI – Global Location Strategies 2 IBM - PLI (Plant Location International) A global IBM service offering  PLI – Global Location Strategies ( aka as IBM-PLI) is a global service offering within IBM Global Business Services (and previously PwC Consulting) exclusively specialized in global location strategies  Our area of expertise focuses on analyzing international business locations for expanding or consolidating companies to select the optimal location (country/region/community/property) against best shareholder value  IBM-PLI is independent from government authorities or other organizations with local interests and fully objective and unbiased in its advice; no conflicts with real estate, tax, incentives or other interests  Unique, unrivalled experience as dedicated corporate investment strategy and location consultant: - Over 45 years active in this consulting area; over 2,000 corporate projects conducted - Multinational, multi-cultural and multilingual team of location experts in key practices for EMEA, Americas, and Asia-Pacific; local satellites and representatives in key markets - Functional, regional and industry specialists within IBM in major locations around the world  Experience with all types of facilities: manufacturing, distribution, shared services, R&D, call centers, data centers, headquarters, etc.

3. IBM Global Business Services © Copyright IBM Corporation 2008 PLI – Global Location Strategies 3 Key practices for Global Location Strategies R&D Center for Economic Development Global hub Local satellites Global Delivery Americas AsiaEMEA

4. IBM Global Business Services © Copyright IBM Corporation 2008 PLI – Global Location Strategies 4 1. Corporate Location Strategies Analyzing international business locations for expanding or consolidating companies to select the optimal location (country/region/property) against best shareholder value From global location strategy definition and country/region screening to local community analysis, site selection and incentive negotiations Network of local subject matter experts available for implementation support 2. Inward Investment and Economic Development Strategies Performance improvement by analyzing competitive position, defining marketing strategies, organizational strengthening, product improvement, development of innovative marketing tools, investment promotion training, etc. All services based on our unique insight in the investor’s perspective Network of local experts available in most countries/regions around the world Key services

5. IBM Global Business Services © Copyright IBM Corporation 2008 PLI – Global Location Strategies 5  The global market for foreign investment is large  Companies are looking more widely for opportunities  More countries position themselves as potential locations for companies, creating a more competitive market for foreign investment  This market is demand, not supply, driven (the investor decides where to locate)  Need to understand your location’s strengths and weaknesses in the competitive market place, from an investor’s perspective!  Need to market your proposition to investors (again keeping the investor’s perspective in mind) Introduction

6. IBM Global Business Services © Copyright IBM Corporation 2008 PLI – Global Location Strategies 6 Typical corporate location selection process 1. Define Project Assumptions and Long List of Location Options 1. Define Project Assumptions and Long List of Location Options 2. Analyze Long-list of Candidate Locations Identify Shortlist 2. Analyze Long-list of Candidate Locations Identify Shortlist 4. Site Search & Negotiations Select Preferred sites and start negotiations 4. Site Search & Negotiations Select Preferred sites and start negotiations 5. Implementation 3. Evaluate Short-listed Locations Select Preferred Location 3. Evaluate Short-listed Locations Select Preferred Location De-select less attractive locations:  In theory, many location options  High level, quick analysis  No field visits; desk research only  Focus on key cost & quality drivers  Input for high level business case  Shortlist of best candidate locations Select best location solution:  Detailed analysis of many factors  Forward looking projections  Assess local market dynamics and implementation risks  Validate right skills availability  Field visits: interviews & negotiations  Few locations only (short list)  Detailed and validated input for final business case  Preferred city (+ back up)

7. IBM Global Business Services © Copyright IBM Corporation 2008 PLI – Global Location Strategies 7 1. Define Project Assumptions and Long List of Location Options 1. Define Project Assumptions and Long List of Location Options 2. Analyze Long-list of Candidate Locations Identify Shortlist 2. Analyze Long-list of Candidate Locations Identify Shortlist 4. Site Search & Negotiations Select Preferred sites and start negotiations 4. Site Search & Negotiations Select Preferred sites and start negotiations 5. Implementation 3. Evaluate Short-listed Locations Select Preferred Location 3. Evaluate Short-listed Locations Select Preferred Location Location factors vary throughout the selection process, depending on objective of different steps Macro Stability/risk Market Costs Workforce/Skills Infrastructure Costs Real Estate Incentives Quality of Life Micro

8. IBM Global Business Services © Copyright IBM Corporation 2008 PLI – Global Location Strategies 8 Re-active Marketing Marketing involvement 1. Define Project Assumptions and Long-list of Location Options 2. Analyze Long-list of Candidate Locations Identify Shortlist 4. Site Search & Negotiations 5. Implementation 3. Evaluate Short-listed Locations Select Preferred Location After-Care Support Information Supply on Key Issues Detailed information Supply (Quotations) Organization & Support in Fact-Finding Trips Support in Negotiations Location decision process

9. IBM Global Business Services © Copyright IBM Corporation 2008 PLI – Global Location Strategies 9 Re-active = act in response to enquiries from investors Advantages:  Enquiries are from seriously interested companies, that have pre-selected your location  Potential for winning the investment project is realistic Disadvantages:  You probably will miss enquiries from investors that have not pre-selected you but for which your location offers strong opportunities  Investment promotion does not contribute to economic development strategy with a focus on stimulating inward investment in specific industries Pros and cons of re-active marketing

10. IBM Global Business Services © Copyright IBM Corporation 2008 PLI – Global Location Strategies 10 2. Analyze Long-list of Candidate Locations Identify Shortlist Corporate location decision process Location marketing process 1. Product Definition 2. Target Group Selection 4. Site Proposal + Information 5. After-Care Support 3. Identification of Potential Investors Company Targeting 1. Define Project Assumptions and Long-list of Location Options 4. Site Search & Negotiations 5. Implementation Pro-active Marketing 3. Evaluate Short-listed Locations Select Preferred Location

11. IBM Global Business Services © Copyright IBM Corporation 2008 PLI – Global Location Strategies 11 Pros and cons of Pro-active Marketing Pro-active = actively try to identify investment prospects before enquiries are generated Advantages:  Investment promotion strongly contributes to economic development strategy by stimulating inward investment in specific industries  Chances of winning projects by being first IPA to discuss project Disadvantages:  Requires more and dedicated resources  Requires greater sector-specific and commercial understanding

12. IBM Global Business Services © Copyright IBM Corporation 2008 PLI – Global Location Strategies 12 After Care IPA involvement 1. Define Project Assumptions and Long-list of Location Options 2. Analyze Long-list of Candidate Locations Identify Shortlist 4. Site Search & Negotiations 5. Implementation 3. Evaluate Short-listed Locations Select Preferred Location After-Care Support Information Supply on Key Issues Detailed information Supply (Quotations) Organization & Support in Fact-Finding Trips Support in Negotiations Location decision process

13. IBM Global Business Services © Copyright IBM Corporation 2008 PLI – Global Location Strategies 13  Experience from many regions around the world shows that 70-80% of investment relates to already established base of investors  After care is a dedicated service to assist investors after investment implementation  The service offers strong marketing opportunities as well, with a focus on: - Supporting re-investment - Increasing the value of investment to the host country - Helping to ‘embed’ companies more strongly in the area - Generating new leads After care

14. IBM Global Business Services © Copyright IBM Corporation 2008 PLI – Global Location Strategies 14  Have you identified your target sectors (is this based on actual strengths or aspirations)?  Are you tailoring your marketing to your target sectors?  Are you mainly pro-actively or re-actively marketing your location?  What involvement does the private sector (investors) have in your marketing efforts? Questions for your marketing strategy