Running Head:Factors to Evaluate in Making a Location Decision

In industry and commerce one of the most critical aspect of the future tense success of every short letter entity, is the strategic localisation principle where the business is supposititious to be set up. With the advent of tech no.ogy, increased competition, salute cutting measures and packaging in business infrastructure, the ending making process of identifying the most high-flown military positions to set up a business has become more change and dynamic. (MacCarthy B.L. & Atthirawong W. 2003).The location decision process is an intricate process that involves the systematic feasibility study of a location with the view of establishing the advantages that would accrue to the organizations locality. The assessment of a extra location is an assignment that the enterprisingness should exhaustively conduct because it depart influence its survivalThe site where such a business is located is of central importance because it descends not only the battle of the enterpris e but its production and overhead capacities as well. Therefore any organization willing to progress has got to evaluate and invest heavily in the location decision process. (MacCarthy, B.L., & Atthirawong W. 2003)It is important before discussing the portions that influence location decision to understand that versatile industries differ in the way they assess these factors. multinational organizations setting up bases in foreign countries will always cede different methodology from an organization setting up base at local level. The aid industrys evaluation program will likewise differ from a manufacturing entity whereas the service industrys study criteria would be the proximity to the market and the consumers ability to buy, the manufacturing entity would be different. A manufacturing plants chief(prenominal) focus besides the availability of the market would generally be cost cutting factors.These paper is going to address factors that would be important for an transna tional firm looking for a location in tonic global market.There are various factors that such an organization is supposed to pay particular attention to.These factors influence the ability of the organization/industry to achieve its tendency and mission. A location decision considers both economic and non-economic factors, which are sometimes referred to as financial and non-financial considerations. The first step towards making a pose and comprehensive decision is started off by defining the problem. The recognition that in that location is a motivation for a bleak location, which is necessitated by such factors asNew competitionBusiness expansionChange in node needsWhen the problem or the reason for looking for a new location has been assessed and defined then the next important stage is to critically examine the various factors that are supposed to be evaluated in identifying the location of the enterprise. This factors are categorized into two stinting factors and non e conomic factorsEconomic Factors Economic factors will make up ones mind the pro pictureability of the enterprise. Under economic factors cost that need to be evaluated are production costs, which would allow in the cost of energy (electricity), cost of raw materials, cost of taxation and wage rate within the new location. Wage rates on the opposite hand will alter the association determine among other things level of production, the payroll budget and so the cost of the end product (Bognanno M. F. Et al 2005).Procurement costs also play a vital role in selecting the site because they determine the total cost of the end product or service. Procurement costs include cost of sourcing of raw materials, cost of transportation and other logistical issues.Distribution costs determine the penetration level of the goods or go that are being offered by the enterprise. The market accessibility is the differentiate throw when assessing the market and would include the infrastructure d evelopment within the specified location, regularity of transportation and the number of distribution channels. In most international companies the greatest factor remains the market size at the host rude and the accessibility to other lucrative markets. (Spee R. & Wim D.2003)Transport and infrastructure are key element to consider when evaluating the location. These two are important factors especially for the service industry that need to stay close to their market. Infrastructure may include such aspects as level of technological integration the standard of the passage network or rail network, the accessibility to such institutions like banks and other credit points.The telecommunication systems also are part of the infrastructure manikin and such factors like Internet, telephone, mobile phones and Information technology advancement determine how well the enterprise will be able to coordinate its various activities. (Spee R. & Wim D.2003)Non-monetary/non-economic factorsThese are factors that do not necessarily have any stock-still monetary value yet they contribute significantly towards the enterprises productivity. Top of this disposition are government and political issues. Policies developed by respective governments determine how well the organization is able to fit in the particular environment. mo of trade licenses, patent protection laws, industrial safety regulation, the tax regime, levelheaded settlement process, environmental laws and so on are some of the considerations that the company needs to consider. (Talley-Seijn, M.2004)Labor characteristics are another non-economic factor that affects the location decision. The characteristics of the chore determine how fast the company will be able to fit within a particular environment. The availability of human solicitude resources and specialized skills will enable the company to conduct various production and management processes in the most efficient manner. Availability of technical kno w-how, experienced power and well-equipped labor force is the key driver to how the entity will conduct its business. (Brush, T. H.1999) giving medication stability is very important for any organization. Stability can be looked in terms of how the government handles transition from one regime to another, its descent with the neighboring countries and its governance abilities. In democratic countries this is a major factor to consider because the stability of the said government directly affects strategic plans that the enterprise may come up with. (Brush, T. H.1999)REFERENCESBognanno, Mario F., Michael P. Keane, and Donghoon Yang. (2005) The Influence of Wages and Industrial traffic Environments on the Production Location Decisions of U.S. Multinational Corporations. Industrial and Labor traffic Review 58, no. 2Brush, Thomas H (1999) plant location decision in multinational manufacturing firms An empirical analysis of international business and manufacturing strategy perspectiv es, The. Production and Operations solicitude.MacCarthy, B.L., and W. Atthirawong. (2003) Factors Affecting Location Decisions in transnational OperationsA Delphi Study. International Journal of Operations and Production Management 23, no. 7 794828.Spee, Roel, and Wim Douw. (September 2003) Cost-Reduction Location Strategies. Journal of Corporate Real dry land 6, no. 1Talley-Seijn, Margaret. (July 2004) 30 Years of Location Strategies. Plants, Sites and Parks 31, no. 3 2629.