"Romancing The Stone"

Branch Plants - How to Pursue Them and Keep Them

Abstract

This article was first published in the Economic Development Review (Winter, 1987), and was awarded the Howard G. Roepke Memorial Award by the AEDC Educational Foundation as best article of the year 1987.

Branch plants of large companies are attractive targets that municipalities often seek to bring to their communities. This article describes what is involved in successfully pursuing branch plant investment in a community, as well as keeping them in the community for the longer term, as branch plants are susceptible to operating for only a short time in a community under certain conditions. Successful branch plant investment involves developing a solid strategy first before taking action. Factors to consider include understanding which firms may be seeking market entry and what their needs would be, who the key individuals would be to approach within firms of interest, and determining whether the branch plant would fit into the community. In order to gather this information, the Economic Development Professional would consult literature searches, corporate reports, market intelligence from firm customers, suppliers, and other government officials. In order to make an introduction to the firm, it is more effective to target the key individuals found directly, rather than cold calling or attending conventions in order to stand apart from the crowd. Once a branch plant is established in a community it is important to maintain the relationship with the firm and engage them in the community, even though Economic Development Professionals often face political pressure to divert their attention to other new prospects instead, as a strong relationship can help prevent, or at least mitigate, the pitfalls of branch plants moving away once grants expire, or after a change in ownership.