Chapter 14: Operational Strategies: Location
- Created by: humbuggirl
- Created on: 05-02-15 19:23
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- Operational Strategies: Location
- Main factors influencing business location
- technology
- allowed businesses to be more flexible
- can operate from a much wider choice of locations
- costs of factors of prosuction
- main costs are land costs, transport costs, labour costs
- most businesses aim to locate at least-cost site
- infrastructure
- will look at quality of new location compared to existing
- network of utilities such as transport links, health and education facilities, telecommunication systems
- qualitative factors
- may wish to be located near good local facilities
- may wish to locate close to owners home
- technology
- Factors influencing location decisions involving expansion / relocation
- resources
- crucial influence on primary sector businesses
- weight-gaining industries tend to locate close to their market
- weight-losing industries tend to locate close to their raw materials
- the market
- save transport costs if located close to their market
- government interention
- may provide assistance in some areas in the form of grants
- member countries of the EU must regulate their regional policy within the guidelines set by the European Commission
- resources
- Industrial Inertia
- another factor that can influence location
- once established, firms may be reluctant to relocate
- may be due to benefits from external economies of scale
- labour supply with skills needed by firms in that industry
- specialist training facilities in the region
- suppliers and customers based locally
- infrastructure that is geared towards the needs of the industry
- Issues relating to international locations
- global markets
- cost reduction
- avoidance of trade barriers
- Benefits of optimal location
- improving competitiveness
- providing a USP
- increasing flexibility
- increasing access to customers
- Multi-site locations
- Advantages
- lower costs
- improved market focus
- avoidance of trade barriers
- increased flexibility
- overcoming cultural difficulties
- regional specialisation
- Disadvantages
- cultural differences
- loss of control
- increased risk
- increased unit costs
- globalisation
- Advantages
- Methods of making location decisions
- location decisions using qualitative factors
- location decisions from investment appraisal
- Other factors affecting relocation
- loss of skills developed in existing workforce
- lower morale and productivity before relocation
- cost of relocation
- finding new suppliers and customers
- break-up of working groups
- redundancy payments
- Main factors influencing business location
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