MGT 303 Lecture Notes - Lecture 3: Bombardier Talent 2
26 Jul 2016
School
Department
Course
Professor
Document Summary
Most important strategic decision, is where to locate their operations. Location greatly affects both xed and variable costs. Location has a major impact on overall risk and pro t of the company. Costs on location include taxes, wages, raw material costs, and rents. Companies must change location for certain speci c reasons: (1) demand has outgrown the current plant"s capacity, or. (3) exchange rates, cost, or local attitude, or. (4) shifts in demographics and customer demand. Location options include: expanding an existing facility, instead of moving, maintaining current sites while adding another facility elsewhere, closing existing facility and moving to another location. The objective of location strategy is to maximize the bene t of location to the rm. *when innovation is the focus, and not costs, there are four attributes that apply: presence of high quality inputs - technical talent, environment that encourages investors, pressure of sophisticated local markets, local presence of supporting industries.
