AIMS 3770 – Dr. Leon
Reading Assignment #2 – Location Strategies
* Text Reading: Chapter 8, pp. 312-319, 324-329
WSJ articles in MyLMUConnect’s Current Events menu option
* Study Guide Questions:
1. The general objective of location strategy is to maximize the benefit of the
location to the firm. What strategic focus (page 314) does this imply for
a. Industrial manufacturing firms:
b. Retail and services:
c. Warehousing:
2. The sequence of location decisions is:
a. _______________  ____________ ____________
From Figure 8.1, list three factors that you think are most critical for
b. Stage 1 of the sequence decision
i.
ii.
iii.
c. Stage 2 of the sequence decision
i.
ii.
iii.
d. Stage 3 of the sequence decision
i.
ii.
iii.
3. List four examples of tangible location costs:
a.
b.
c.
d.
4. List four examples of intangible location costs:
a.
b.
c.
d.
5. List three business categories (not three examples of businesses in one category)
that are concerned about their proximity to market:
a.
b.
c.
6. Incentives are a very important factor in location decisions. (See the WSJ article
posted on MyLMUConnect “Take the Money and Don’t Run” and the OM in
Action on page 317). Describe the types of incentive packages that states and
cities create to entice a business to locate in their geographical region. Read the
ethical dilemma on page 329. What are some of the challenges that states and
cities face? Be prepared to discuss the benefits and ethical implications of
incentives and what states and cities should consider when designing a bid for a
new business.
7. What is clustering? Look at examples in Table 8.3. What are some reasons that
companies cluster? (i.e. what type of resources are the companies clustering
around?)
8. List four location factors that can affect a service firm’s revenue (Table 8.6). Do
not include advertising/pricing, (which is not a location factor), or the cost
determinents:
a.
b.
c.
d.
9. According to your text, what was the initial primary location factor for call center
firms? Why? What are other primary location factors that have more recently
been identified as important for call centers? How has this impacted some
country decisions?
10. What are geographic information systems? How do retailers and service firms
use GISs to identify and evaluate different possible locations? Be prepared to
provide details of examples for real companies. (page 327-328)