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Welcome UniConsult Research Report Research in Motion Limited Mandate: Where should RIM locate additional manufacturing capacity? Rational: Choice of a.

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Presentation on theme: "Welcome UniConsult Research Report Research in Motion Limited Mandate: Where should RIM locate additional manufacturing capacity? Rational: Choice of a."— Presentation transcript:

1 Welcome UniConsult Research Report Research in Motion Limited Mandate: Where should RIM locate additional manufacturing capacity? Rational: Choice of a location has a direct impact on the ability to achieve corporate goals. Project Manager: Stephan Bruenner

2 Overview UniConsult Research in Motion (RIM) The Analytical Framework Locational Requirements Evaluation of Potential Sites Conclusion 10 min 07 min 11 min 12 min 05 min

3 Research in Motion UniConsult Research In Motion Limited based in Waterloo Ontario, is a fast-growing leader in designing, manufacturing and marketing of wireless technology for the mobile communication market. Start-up phase ( ) M. Lazaridis founded RIM as UW spin-off Customised electronic/software engineering services Innovation: electronic sign system (LED + LAN) RIM sold its business to invest in wireless technology

4 Research in Motion UniConsult Entering the wireless market ( ) J. Balsillie bought into RIM Move to University Business Park Partnerships, funding, IPO Investment in R&D, BlackBerry pager with unique features Success in time-sensitive, professional user groups Competing in the wireless market (1999-present) 2-way-pager becomes a full hand-held Installation of RIM systems in 7,000 North American companies Additional distribution channels Penetration of mass markets (USA, Canada, Europe)

5 Products UniConsult Product Divisions Pager & hand-helds (80% of revenues) Embedded radio modems RIM wireless PC card

6 Products UniConsult Future Products Java-enabled device (generates more service/software revenues) Compete against Palm and Handspring Voice-enabled device Compete against “convergence” specialists (Nokia, Motorola, Ericsson)

7 Research in Motion -Figures- UniConsult Hyper Growth Consistently to the rapid growth, significant investments were made into land, office buildings, production equipment and tooling, research and development and computer infrastructure.

8 Spatial Allocation UniConsult Purchase of 2 adjacent business parks (University Business Park and Technology Business Park) in Waterloo with 273,000 Sq.ft. office space. Construction of additional office space (four storey building) Free 2,6 ha lot

9 Manufacturing Capacity UniConsult Rapid market growth (expected 550 million in 2001) RIM expexted to ship around 1 million in 2001(Merrill Lynch) Shoemaker plant can produce 1 million in 2000/year Growth rate (sales) 70-90% each year Shoemaker plant can be tuned up to max. 5-6 million per year

10 Conclusion UniConsult What does RIM need ? To accommodate future growth a new manufacturing plant must be planned, built and tooled up within the next 3 years. Assuming 60% growth rate (sales in 2004+) the plant should have 160,000 Sq.ft. production floor to accommodate demand until Building space would be ca Sq.ft.. Industrial land should have at least 600,000 Sq.ft. (one story building,parking lot etc.).

11 Location for the new plant UniConsult Analytical Framework Economic activities Locational properties Matching Spatial production requirements put forward by companies Locational properties and characteristics of location sites Match made by decision-maker Suitable location site Source: After Witlox, 2000

12 Location for the new plant UniConsult Analytical Framework Economic activities Locational properties Spatial production requirements put forward by companies Locational properties and characteristics of location sites Match made by decision-maker Suitable location site Source: After Witlox, 2000 Non-compensatory Compensatory Over qualified Under qualified

13 Locational Requirements UniConsult Non-compensatory Factors -Very high priority-

14 Locational Requirements UniConsult Non-compensatory Factors Priority -Very high- - High- -Moderate-

15 Locational Requirements UniConsult Compensatory Factors Priority -High- -Moderate- -Low-

16 Evaluation of potential Sites UniConsult Search Areas Mississauga, Ontario, Canada Kanata (Ottawa), Ontario, Canada Region of Waterloo, Ontario, Canada

17 Evaluation of potential Sites UniConsult Why Ontario? Ontario businesses enjoy overall cost advantages relative to other U.S. and European locations. Easy access to North America's industrial heartland and massive consumer markets Within a day's drive of 120 million consumers Most industrialized province Diversified industrial base Stable and pro-business Excellent infrastructure (road, rail, airports, energy) Source: Ministry of Economic Development and Trade

18 Evaluation of potential Sites Search Areas Mississauga Kanata Waterloo

19 M: Highway, Train, Airport K: Highway, Airport W: Highway (Airport) Evaluation of potential Sites UniConsult Non-compensatory factors -transport connection-

20 For all areas less than 3 years. Evaluation of potential Sites UniConsult Non-compensatory factors - Set-up time -

21 In all areas min. 300,000 Sq.ft. industrail land is available. Evaluation of potential Sites UniConsult Non-compensatory factors -Land availability-

22 In all areas less than 1 hour. Mississauga less than 30 minutes. Evaluation of potential Sites UniConsult Non-compensatory factors -Proximity to labour force-

23 In all areas stable and relatively little humidity Evaluation of potential Sites UniConsult Non-compensatory factors -Natural Environment-

24 M: Yes, if shoemaker manufacturing plant continous production K: Yes, if shoemaker manufacturing plant continous production W: Yes, even if Shoemaker plant will be closed. Evaluation of potential Sites UniConsult Non-compensatory factors -Prox. of engineers-

25 In all areas industrial land is ready to built on Evaluation of potential Sites UniConsult Non-compensatory factors -Zoning-

26 In all areas specialised services (tooling, maintenance) are available in less than 2 hours Evaluation of potential Sites UniConsult Non-compensatory factors -Specialised services-

27 Evaluation of potential Sites UniConsult In all areas other professional services (insurance agents, lawyers, financing, further training and others) are available in less than 1 hour. In Kanata and Mississauga accessibility is much higher Non-compensatory factors -Other professional services-

28 Evaluation of potential Sites UniConsult Mississauga and Kanata provide too good transport connections and unneccessarily good access to professional services. Non-compensatory factors -preliminary conclusion-

29 Evaluation of potential Sites UniConsult All areas are located in Ontario Generally good export climate (NAFTA) + stable currency Compensatory factors -Export climate-

30 Evaluation of potential Sites UniConsult M: $Can 592, ,000 K: $Can 370, W: $Can 220, ,000 (estimated) M exceeds the average more than 25% and seems over qualified Compensatory factors -Land costs per ha -

31 Evaluation of potential Sites UniConsult M: $Can 45 K: $Can 10.2 W: $Can 22.8 (Municipality) W: $Can M exceeds the average more than 25%. Compensatory factors -Development charges(2000) per sqm-

32 Evaluation of potential Sites UniConsult M: $Can 0.063/Kwh K: $Can /Kwh W: $Can 0.042/Kwh In all areas “power infrastructur” is excellent M does not provide a competitve electricity rate Compensatory factors -Electricity rates-

33 Evaluation of potential Sites UniConsult A new plant in Mississauga provides moderate opportunities for A new plant in Kanata provides no “agglomeration- advanatages” Only a new plant in Waterloo would provide good opportunities resulting from agglomeration Compensatory factors -Proximity of plants-

34 Evaluation of potential Sites UniConsult Only a plant in Waterloo would offer advantages of fast face-to-face feedback. Compensatory factors -Proximity to headquarter-

35 Evaluation of potential Sites UniConsult The cost of labour is in all areas quite similar Compensatory factors -Cost of labour-

36 Evaluation of potential Sites UniConsult The cost of labour is in all areas quite similar Compensatory factors -Cost of labour-

37 Evaluation of potential Sites UniConsult Environmental restrictions are standards Generally a pro-business climate Compensatory factors -Environmental restrictions-

38 Welcome UniConsult Research Report Research in Motion Ltd. Mandate: Where should RIM locate additional manufacturing capacity? Project Manager: Stephan Bruenner

39 Welcome UniConsult Research Report Research in Motion Ltd. Mandate: Where should RIM locate additional manufacturing capacity? Project Manager: Stephan Bruenner


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