CESAREVIC L.

RAGANAS
LOCATION
PLANNING
and ANALYSIS
Involves the need for
location decision factors
that affect them, and
guidelines for evaluating
location alternatives
THE STRATEGIC
IMPORTANCE OF LOCATION

 One of the most important decisions a firm makes

 Increasingly global in nature
 Significant impact on fixed and variable costs
 Decisions made relatively infrequently
 Long-term decisions
 Once committed to a location, many resource and
cost issues are difficult to change
The objective of location strategy is
to MAXIMIZE the benefit of location
to the firm.
LOCATION DECISIONS: OBJECTIVES
Location decisions are based on:
◦ Profit potential or cost and customer service
◦ Finding a number of acceptable locations
from which to choose
◦ Position in the supply chain
◦ End: accessibility, consumer demographics, traffic patterns,
and local customs are important
◦ Middle: locate near suppliers or markets
◦ Beginning: locate near the source of raw materials
◦ Web-based retail organizations are effectively
location independent
SUPPLY CHAIN
CONSIDERATIONS
GLOBAL LOCATION:FACILITATING
FACTORS
GLOBAL LOCATION: BENEFITS
A wide range of benefits have accrued to
organizations that have globalized operations:
• Markets
• Cost savings
• Legal and regulatory
• Financial
GLOBAL LOCATION: DISADVANTAGES
GLOBAL LOCATION: RISKS
MANAGING GLOBAL OPERATIONS
 NATURE OF LOCATION DECISIONS
 STRATEGIC IMPORTANCE
• Long term commitment/costs
• Impact on investments, revenues, and operations
• Supply chains
 OBJECTIVES
• Profit potential
• No single location may be better than others
• Identify several locations from which to choose
 OPTIONS
• Expand existing facilities
• Add new facilities
• Move
THANK YOU