Location-specific advanages

V.S

WHO WILL WIN THE BATTLE

Location-Specific Advantages and Strategic Goals

What is location-specific advantages?
The benefits a firm reaps from the features specific to a place.

Certain locations simply possess geographical features that are difficult for others to match. Example given in the book on page 145, Singapore is an ideal stopping point for air traffic between Europe and Australia and for sea traffic between the Middle East and East Asia.

Location-specific advantages stem from
1) Knowledge spillovers among closely located firms that attempt to hire individuals from competitors.
2) Industry demand that creates skilled labor force whose members may work for different firms without having to move out of the region.
3) Industry demand that facilitates a pool of specialized suppliers and buyers to also locate in the region.

Four Strategic Goals

1. Natural Resources- Possessions of natural resources and related transport and communication infrastructure.
2. Market Seeking- Abundance of strong market demand and customers willing to pay.
3. Efficiency Seeking- Economics of scale and abundance of low-cost factors.
4. Innovation Seeking- Abundance of innovative individuals, firms, and universities.

On page 146, it is interesting to read " China now manufactures two thirds of the world's photocopiers, shoes, toys and microwave ovens; one half of the DVD players, digital cameras, and textiles; one third of the desktop computers; and one quarter of the mobile phones, television sets, and steel."

This is interesting to learn about because a lot of the normal household or everyday items are made in China. In one of my discussion post I listed off a few items I looked at. Below are some examples:

1) Emerson Television Set bought at Wal-Mart= Made in China
2) Skateboard shoes bought at Wal-Mart= Made in China
3) Tank top from JcPenny=Made in Indonesia
4)My Boston Red Sox hat from Fenway= Made in China
5) Monkey soap dispenser bought at Sears= Made in China
6) Camera bought at Wal-Mart= Made in China
7) Fun bands/Silly Bandz= Made in China
8) Simply for Sports shorts bought at JcPenny= Made in China
9) Shirt from Sears= Made in Nicaragua
10) Shirt from Sears= Made in U.S.A.



Looking at these 10 item, 70% were made in China. By the looks of my results, it may look that certain companies only buy from a certain country. Like it seems like everything Wal-Mart carries is made in China. For a fun experience and to learn something, next time you go to Wal-Mart, pick up some random things and look where there from. It looks like Sears does not have a specific country they get their products from seeing as items I listed were made in Nicaragua, U.S.A and China.

Everyone knows the famous Wal-Mart saying "Always low prices." If Wal-Mart was not so cheap they would be out of business because the only reason people shop there is for the always low prices.

Location-specific advantages may grow, change, and/or decline, prompting a firm to relocate.

In addition to the strategic goals listed above, another set of considerations centers on cultural/institutional distances as we learned throughout chapters 2 and 3.

What is Cultural Distance?
The difference between two cultures along identifiable dimensions such as indivisualism.
Institutional distance is the extent of similarity or dissimilarity between the regulatoryu, normative and cognitive institutions of two countries.