Factors That Influence Companies' Choice Of Location - Dissertation Example

In establishing the organisation‘s strategic approaches, it involves the determination of the factors affecting both the endogenous and exogenous environment of the firm (Kotler 2008). This is necessary as organisations do not operate in a vacuum, but it performs its transactions within the spectrum of society (Kotler 2008). In this regard, one of the salient issues that are determinative of the failure or success of an organisation is its location (Roslin and Rosnan 2012). An excellent location provides certain advantages and benefits to the firm, and these are 1.

Increase profits 2. Employment opportunities. 3. It gives companies the chance to be closer to both its target market and resources 4. Reduces the cost of production 5. Provides an opportunity for the organisation to utilise its location for its competitive advantage (Boone & Kurtz, 2006; Hoogstra and van Dijk 2004; Roslin and Rosnan 2012). As such, the decision for the organisation’s location is pivotal for the survival and success of the organisation as it responds to the demands of the stringent global economic market. . Increase profits 2.

Employment opportunities. 3. It gives companies the chance to be closer to both its target market and resources 4. Reduces the cost of production 5. Provides an opportunity for the organisation to utilise its location for its competitive advantage (Boone & Kurtz, 2006; Hoogstra and van Dijk 2004; Roslin and Rosnan 2012). As such, the decision for the organisation’s location is pivotal for the survival and success of the organisation as it responds to the demands of the stringent global economic market.

This involves not only short-term but also long-term factor of the organization and therefore decision making of pertinent to location should be undertaken with outmost planning and sagacity in order to minimise, if not totally eliminate, risks that may arise because of the location decision of the company (Jain 2010). However, according to Roslin and Rosnan (2012), the impact of location has been downplayed not only by scholars but also by organisations themselves. Locational decision has been normally made not in view of organisational strategy and tactic, but often in terms of profit and cost saving measures (Blair and Premus 1998).

Besides, there is an unresolved ambiguity between location and environment which results in a superficial study of location especially in the retail sector (Clarke and Hallsworth 1994) Furthermore, this is evident when it comes to small and medium size enterprises. Although the notion of location seems to be a fundamental factor affecting the dynamics and dynamism of the firm, small enterprises are not given the ample guidance and help in making the appropriate location decision. This observation becomes more serious as it is acknowledged that there is no best or perfect location