TABLE OF CONTENTS Location is a strategic issue, and the decision where to locate cannot be taken lightly. It is the first decision in the implementation of a project (that is, once it has been agreed to go ahead). Upon taking this decision, an investment is made which is irreversible. That investment in bricks and mortar cannot physically be transferred to another location if the decision turns out to be wrong. In time, the assets may be realized but probably at much lower values than paid.
Traditionally, companies have sought to acquire competitive advantage over their rivals through their choice of location. In a historical context, firms tended to establish their factories for reasons of economic geography, e.g.:
Proximity to raw material source
Proximity to relatively cheap and abundant energy
Availability of relatively inexpensive manpower or specialist skills
Good transport links with materials suppliers and markets.
In more recent times the location decision has been influenced by government intervention, e.g.:
High tariff duties imposed on imports which encourage exporters to that country to consider setting up local operations
Investment incentives in the form of tax relief and grants
The provision of infrastructure, especially improved transport communication
In today's world the decision is more complex. Markets are more sophisticated, skills can be in short supply, technological change can soon outdate newly installed processes, and there has been a...
