1 / 14

Location Strategy

Location Strategy. Introduction. What – Location Decisions Where – Important to company Why – Costly to change. Why is Location Important? . Affects costs Costs of inputs depend on region Characteristics of labour force depend on region Difficult to change once decision made

anka
Download Presentation

Location Strategy

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Location Strategy

  2. Introduction • What – Location Decisions • Where – Important to company • Why – Costly to change

  3. Why is Location Important? • Affects costs • Costs of inputs depend on region • Characteristics of labour force depend on region • Difficult to change once decision made • Objective: maximize benefits of location to the firm

  4. Factors • Labour Productivity • Exchange Rates • Tangible Costs • Intangible Costs • Attitudes • Proximity to Markets • Proximity to Suppliers • Proximity to Competitors

  5. Choosing a Country • Government • Culture and economics • Market locations • Labour • Availability of Inputs • Exchange rate

  6. Choosing a Community • Corporate desires • Attractiveness • Labour • Utilities • Environmental Regulations • Government Incentives • Proximity • Land and Construction Costs

  7. Choosing a Site • Size and Cost • Air, rail, highway, waterway systems • Zoning restrictions • Nearness of services and suppliers • Environmental impact

  8. Evaluating Location Alternatives • How do we choose between locations?

  9. Factor Rating • Develop list of factors • Weight each factor • Develop scale for each factor • Score each location for each factor • Multiply score by weights • Sum points

  10. Break-Even Analysis • Determine fixed and variable costs for each location • Plot costs vs volume • Select location with lowest total cost for expected production volume

  11. Chicago Bowling Green Bowling Green lowest cost Akron lowest cost Chicago lowest cost Break-Even Analysis 200000 Akron 150000 Annual Cost 100000 50000 0 0 500 1000 1500 2000 2500 3000 Volume

  12. Center of Gravity Method

  13. Transportation Model

  14. Service Location Strategy • Maximize volume of business and revenue • Purchasing Power • Compatibility with demographics • Competition • Quality of Competition • Uniqueness of location • Physical qualities of facilities • Operating Policies • Quality of Management

More Related