When Porsche decided to enter the SUV market with its luxury Cayenne model, it surprised the auto industry by locating its new assembly plant in Leipzig in Eastern Germany. Many observers believed that Porsche should have located the plant either in Central or Eastern Europe where labor costs were very low or (like Mercedes and BMW) in the US where it would be close to its major market. Using the criteria outlined in Figure 12.5, can you explain Porsche's decision?
What will be the key developments in the global environment of business during the next five years? On the basis of these, what will be the greatest challenges that firms from the advanced industrialized countries will face? What strategies will firms need to adopt in order to prosper in the environment you foresee?