Location Decisions
Location, location, location! Where a firm intends to build its facilities is of strategic importance. Before the location decision can be made, many factors must be taken into consideration. In this assignment, you will explore the seven major factors that affect location decisions.
Review the module resources associated with location strategies. Identify a company that currently has no international locations. Assume that the company wishes to expand into a foreign market and you are the chairperson on the location selection committee. It is your job to recommend the best region or country in which to locate.
Write a 500-750 word (two to three page) paper using current Writing Style Guideformatting.
Include the following:
Provide a brief overview of your selected company (~1 paragraph).
Explain the advantages and disadvantages of each of the seven major factors that affect location decisions and how they will affect your chosen firm.
Provide a recommendation on the best region (country) for your selected company to locate and justify.
The business chosen should be from the USA and does not currently have any international locations.
The description requires the advantages and disadvantages of the seven major factors that affect location decisions…seen below
The seven factors affecting a location decision in operations management are facilities, competition, logistics, labor, community and site, political risk and incentives, according to Reference for Business
Sample Solution
The company chosen for this discussion is Amazon, an American e-commerce, cloud computing, and AI technology company. Founded in 1994 by Jeff Bezos, the company has grown to become one of the largest retailers in the world (Statista Inc., 2021). Currently, Amazon only operates in North America but wishes to expand into a foreign market. Therefore, it is necessary to consider the advantages and disadvantages associated with each of the seven major factors that affect location decisions when selecting a region or country for expansion.
Economic Factors: Economic factors will be important considerations when selecting a new location for Amazon’s operations. An attractive economic environment may provide incentives such as tax breaks or subsidies which could lead to increased profits for Amazon (Lowe et al., 2020). On the other hand, an unstable economic situation could potentially lead to political unrest or currency fluctuations that would adversely affect profitability.
Political Factors: Political factors are also essential considerations since they relate directly to government policies such as trade restrictions or tariffs that can influence operations within certain regions (Gao et al., 2019). Ultimately, it will be beneficial if governments support businesses operating within their borders via favorable regulations and laws; however any instability stemming from political unrest should definitely be avoided at all costs.
Environmental Factors: Environmental factors can play a major role when deciding on where to locate new offices due to potential effects on both employees and customers (Riekert & Turban 2018). Poor air quality issues caused by overcrowding or industrial pollution must be taken into account while natural disasters may also create difficulties if they occur frequently within a certain area.
Social/Cultural Factors: Social/cultural factors are important characteristics because customer preferences vary depending on cultural norms so it is necessary that these differences are taken into consideration when marketing products abroad (Nguyen et al., 2017). Furthermore language barriers may need to be addressed in order for employees working in different locations worldwide
In conclusion, there are many advantages and disadvantages associated with each of the seven major factors affecting location decisions making it essential that careful consideration is given before selecting a region or country for expansion. By taking all these points into account companies like Amazon can make confident choices about where to best locate their operations internationally.
