Location Strategy

It is crucial for a business to know where their customers come from in order to select the best location for the store. Choosing the best geographic area can help in the success of the business or the failure of the business. This is why Trader Joe’s has particular criteria when choosing new store locations. Trader Joe’s is aware who their target consumer is and utilizes the data they receive to place their locations in the areas that will benefit in the growth of the organization.

1. Should labor practices in another country be a relevant consideration in international trade? Why or why not?

Large corporations such as Nike, Gap, and Reebok and many others from the United States have moved their factories to undeveloped nations; barely pay their employees enough to live on. Countries such as China, Indonesia, and Haiti have readily abundant cheap labor. There should be labor laws or an obligation of respecting workers to provide decent working conditions, fair wages, and safety standards.

Describe at least three potential problems global businesses face when they outsource or subcontract their work to companies in other countries? (e.g., a U.S. sneaker company outsourcing the manufacturing of its sneakers to a separate company in China or Vietnam.)

The company also should consider other factors in choosing the location of the plant including:

As a supply-side strategy for influencing the location choices of firms, tax policy is used to address what kind of costs? Do taxes influence location decisions?

Brand positioning is essential to the success of any firm because it delivers a perception into the consumer’s minds which differentiates them from their competitors. Microsoft began to grow their brand over 20 years ago with Bill Gate’s an underlying vision of “a computer on every desk and in every home”. This resulted in Microsoft developing into a huge multinational company with personal computing at the forefront of their business. Microsoft dominated this industry for many years which is reflected in the high brand recognition of Microsoft products worldwide.

A newly formed firm must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs than locating near the market, but the owners believe there would be a loss in sales volume because customers tend to favor local suppliers. Revenue per unit will be $185 in either case.

To better understand a firm and its placement of its strategies, we must conduct an analysis of factors that might affect its selection of strategies.

Assume that you are executive of a large U.S. multinational cooperation planning to open a new manufacturing plants in China and India to save on labor cost. What factors should you consider when making your decision? Is labor outsourcing to developing countries a legitimate business strategy that can be handled without risk of running into a sweatshop scandal?

Resistance from country managers are mainly due to the following reasons. Firstly, country managers are fully

3- The develop countries will solely Depends on the outsiders for majority of its economy, this put pressure on both company and the hoist country.

Place – Place is also very important in the terms of business because before opening the business they should consider the location properly that are they targeting the proper market according to their business. Place must be easy accessible for customers, suppliers etc.

The company has to decide between the two locations based on their virtues, availability and higher margin of profit.

Locations for outsourcing jobs is very important as companies need to decide what is going to be the cheapest option but also the most beneficial in terms of maintaining their remaining clients and customers, there tends to be quite high volume complaints when it comes to outsourcing jobs, problems can arise often due to language barriers, so choosing the best location