Location Decisions

Question 1

Objectives of location decisions

Answer 1

• Growth objectives (Offsite expansion (Erection) / On site expansion (existing location is expending)
• Structural change objectives (Division (split up the location, partial closure of existing and erection) / relocation (complete closure of existing site and new building of a new site) / consolidation of locations(close one site and perform in the existing other location))
• Downsizing objectives (Partial closure of sites/ Complete shut down)

Question 2

Growth objectives

Answer 2

• Sources of supply
• Production capacities (higher demand, Smurfit Kappa, packaging of liquids
• Range of Products
• Markets

Question 3

Structural Change Objectives

Answer 3

• Experience curve;
• Labour costs;
• Transportation costs;
• JIT supply;
• Traffic situation;
• import restrictions;
• exchange rates;
• market proximity;
• legal restrictions;
• subsidies;
• Taxes;

Question 4

Downsizing objectives

Answer 4

• Production capacities;

- Range of production;

Question 5

Stages of location determination

Answer 5

1. Macro location determination:

National location factors (global regions (EU, NASA, APAC) -> country)

2. Micro location determination:

Regional location factors:

-> state / region ->city/community->plot

Question 6

Location factors

Answer 6

- Company-related location
factors (social situation
• political situation
• legal situation
• economic policy
• state administration)

- Production-related location
factors
 labour force
• land and buildings
• capital
• public infrastructure
• supplier infrastructure
• import opportunities
• climate and geology

- Sales-related location
factors 
• local demand
• competitive situation
• sales infrastructure
• export opportunitie

Question 7

Company related location factors

Answer 7

• Social ( Language, writing, culture, religion, social differences, attitude of the population to work,
  criminality, corruption)
• Political situation (• Political stability: Danger of wars, expropriation, changes in economic conditions)
• Legal situation (• Competition regulations, bans on certain research activities, bans on certain production
  activities, local content requirements, environmental and consumer protection regulations,
  labour law and employee co-determination, cross-border regulations, such as import bans
  or restrictions on the movement of capital.)
• Economic Policy (Tax policy, location-related subsidy policy, economics growth)
• State Administration - effectiveness

Question 8

Internationalization stages of companies

Answer 8

National company (1 site in home country; several sites in home country); —-> International company (several sites in home country and export)—->Multinational company (several sites in home and foreign countries)

Question 9

Influence of the business function and the industry

Answer 9

• Locally differentiated
  Many locations close
  to customers: Sales &
  Service;
• Locally local Few locations: Production &
  Purchasing;
• Globally integrated: One location: Corporate
  management, HR, R&D