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When companies are making investment decisions they have to take into account numerous factors such as regulation, law, competition and supply chain management. When using numerical techniques such as Net Present Value (NPV) the model does not always highlight the extent of the uncertainties involved with any one given project.  At the end of chapter 15 we provided a case study which analysed how the UK electricity generation industry was struggling to find companies willing to commit capital due to the uncertainties raised by future environmental policies and regulation

Many of the companies who would normally make significant investment within the UK turned to the emerging economies to invest because the regulatory constraints were not as severe as in the UK. ABB was one of the companies who choose to invest in the emerging economies (www.ft.com, 13th December 2012).  Although the emerging economies may have provided less regulatory red tape companies investing in these countries have discovered that the supply chain management of such projects have created the return of such projects to be far lower than expected and in some cases impossible to complete.  Investing in countries that are geographically miles away from their own centres of excellence requires a company to rely on local expertise and resources to complete the investment.  As ABB discovered this is not an easy process and they were disappointed with local teams not executing the contracts they had with them. Supply chain management issues are another good example of how investment projects can be far more complicated than initial business plans suggest, especially when investment in new geographical areas where there are no established supply chain contracts.