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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 15.3, can you explain Porsche’s decision?

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