5.4 Location questions for IB Business Management

Tarang Analytics is a data-science consultancy with 120 employees in Bengaluru, India, a city with hundreds of technology firms. Tarang benefits from the city’s large pool of software graduates, local universities and specialist suppliers of cloud services. However, office rents in its district have risen by 35 % in four years, salaries for experienced data scientists are rising quickly as firms compete for them, and staff spend up to three hours a day commuting in heavy traffic.

Maple & Birch Furniture

Maple & Birch Furniture Inc. (M&B) is a Canadian public limited company based in Quebec. It makes solid-wood dining tables and chairs and sells mainly to furniture retailers in Canada and the United States (US). About 55 % of its sales are now in the US.

M&B’s board is considering setting up a wholly owned subsidiary with a factory in Monterrey, Mexico. The factory would supply the US market and allow M&B to sell to Mexico’s growing middle class. The investment would cost CAD 18 million. Mexican wages are lower than in Quebec, and Monterrey is close to the US border.

The chief executive, Jean-Luc Tremblay, argues that international expansion is essential because Canadian sales have been flat for four years. The union representing M&B’s 400 Quebec employees fears job losses. Some board members are concerned about security, changes in trade agreements between the US, Mexico and Canada, and how Mexican consumers would view a Canadian brand.

Table 1: Forecast cost per dining table delivered to US customers (CAD)

Khubz Amal

Khubz Amal (“bread of hope”) is a social enterprise bakery in East Amman, Jordan, founded in 2019 by Leila Haddad. It trains and employs refugee women from Syria and Iraq, many of whom are the only earners in their families and have found it hard to get formal jobs. It sells bread and pastries to cafés, hotels and offices. All surpluses are reinvested in training.

Resource 1: Khubz Amal key figures, 2025

Resource 2: Email from the purchasing manager of a hotel group to Leila

Our four hotels in West Amman would like Khubz Amal to supply 800 croissants and 600 bread rolls every morning, delivered by 6.30 a.m., starting next year. We currently make these ourselves but would prefer to outsource them to a supplier with a social mission. We would need consistent quality and a two-year contract.

Resource 3: Options for a second bakery, prepared by Leila’s operations manager

Resource 4: Social media post by Rania, a Khubz Amal baker

Khubz Amal changed my life. But the bus from my home takes over an hour and costs a lot of my wage. Many of my friends in Mafraq would love this work, but they cannot travel to Amman every day. #BreadOfHope

Resource 5: Extract from a business newspaper

Hotels and offices in Amman are increasingly choosing suppliers with ethical credentials. But social enterprises that grow too fast can struggle: several have lost contracts after failing to deliver on time, and grants for refugee projects in Jordan are falling as donors shift their attention elsewhere.

Vembanad Hospital

[1] Vembanad Hospital (Vembanad) is a privately held company that runs a 180-bed hospital in Kochi, India. It was founded in 2011 by two doctors, Anjali Menon and Ravi Pillai. Vembanad’s mission is “to give every patient the care we would want for our own families”. It offers general surgery, maternity care and a 24-hour emergency department, and employs 410 staff, including 95 nurses.

[2] Vembanad’s operations manager, Suresh Nair, is responsible for turning the hospital’s resources (staff time, medicines, equipment, beds and energy) into patient care. In 2025 patient numbers rose by 14 %, but the average waiting time in the emergency department rose from 40 minutes to 95 minutes. Online reviews began to complain about delays, and two senior nurses resigned, saying that their workload had become “unsafe”.

[3] Suresh believes that part of the problem lies in the hospital’s support services. The laundry and the kitchen are run in-house by 48 employees and use old equipment that consumes large amounts of electricity and water. Suresh has received an offer from CleanServe, a large national company, to take over both functions. CleanServe would cut Vembanad’s annual laundry and catering costs by 22 %, and the laundry building could be turned into a new outpatient clinic.

[4] Anjali is unsure. Several of the laundry and kitchen staff have worked at Vembanad since it opened, and patients often praise the hospital’s food, which is cooked to meet each patient’s dietary needs. CleanServe would deliver meals prepared in a central kitchen 60 km away. Vembanad’s finance director points out that the money saved could pay for 12 additional nurses.

Noyyal Knitwear

[1] Noyyal Knitwear (NK) is a private limited company in Tiruppur, India, that makes cotton T-shirts and children’s clothing for European fashion brands. It spins, dyes and knits fabric, and stitches the garments in its own factory, which employs 900 machine operators. NK borrowed heavily in 2022 to buy new stitching machines.

[2] NK’s managing director, Arjun Pillai, has compared NK’s performance with the average for the Tiruppur garment industry (Table 2). He proposes to subcontract all stitching to small local workshops. He estimates that this would cut NK’s cost of sales by ₹60m a year, but NK would need to spend ₹12m a year on extra quality inspectors. NK could sell its stitching machines for ₹200m and use the money to repay part of its long-term loans.

[3] NK’s European customers audit their suppliers’ working conditions. Several workshops in Tiruppur have been criticized by campaign groups for long working hours. The trade union representing NK’s machine operators has said it will oppose any job losses.

Table 1: Extracts from NK’s final accounts for the year ending 31 March 2026 (₹m)

Table 2: Average ratios for garment manufacturers in Tiruppur, 2025–26

Moto Safi Stoves Ltd (MSS)

Read the resources and answer the questions that follow.

Moto Safi Stoves Ltd (MSS) is a social enterprise in Nakuru, Kenya, founded in 2017 by Nduta Wahome and Peter Wekesa. Moto safi means “clean fire” in Swahili. MSS sells efficient cookstoves that use half as much charcoal or wood as a traditional stove and produce about 70 % less smoke. Smoke from cooking fires causes serious lung disease, especially among women and children. A stove costs KES 4 500, which customers can pay in small daily instalments by mobile phone over 90 days. MSS imports the stoves from a manufacturer in China and now wants to build its own factory in Nakuru.

Image: a squat, round metal cookstove painted bright blue, with a clay lining and a pot of ugali steaming on top. A woman sits beside it on a low stool, smiling. Text: “Moto Safi – half the charcoal, none of the cough”.

Resource 1 – News article from the *Rift Valley Business Journal*

Clean-cooking firm plans Nakuru factory – but who will pay for it?

More than two-thirds of Kenyan households still cook with charcoal or wood. MSS has sold over 120 000 stoves since 2017 and says a family saves about KES 1 200 a month on charcoal. Its plan for a factory employing 70 people has been welcomed by the county government. But the investment is large for a young company, and some carbon-credit schemes in East Africa have recently been criticized for overstating the emissions they save.

Table 1: MSS stove sales

Resource 2 – Social media posts from Akinyi, an MSS customer in Kisumu

Since I got my Moto Safi stove I buy one sack of charcoal a month instead of two, and my daughter’s cough has gone. Paying KES 50 a day was easy. Every mother should have one. [1/2]

But my sister has been waiting six weeks – the agent says the stoves are “stuck at the port”. Please, MSS, make them here in Kenya! [2/2]

Resource 3 – Internal email from Grace Mutua, finance manager, to the founders

From: Grace Mutua, Finance Manager

To: Nduta Wahome; Peter Wekesa

Subject: Financing the factory

The factory, machinery and first stock will cost about KES 150 million. We have KES 9 million in cash. Options I have explored:

1. Bank loan: KES 150 million at 16 % a year over five years, secured on the factory.

2. Impact investor: KES 100 million for 35 % of our shares and a seat on the board. They expect to sell their shares within seven years.

3. Carbon-credit pre-sale: a climate fund would pay KES 60 million now in return for all the carbon credits from stoves we sell over the next five years. At today’s prices those credits could be worth about KES 25 million a year if we sold them ourselves.

4. Crowdfunding from Kenyans living abroad: about KES 20 million as loans at 8 % a year.

5. Microfinance partner: a microfinance provider would lend to our customers directly, so we would be paid the full price at the time of sale. It would charge customers 2.5 % a month.

We should also remember that unpaid instalments (debtors) already tie up KES 38 million.

CONFIDENTIAL: this email and any attachments are intended only for the named recipients.

Resource 4 – MSS’s statement of profit or loss for the year ended 31 December 2025 (KES million)

Resource 5 – Factory plan: key figures

Resource 6 – Survey of MSS customers (500 replies)