Location & Relocation Strategy
Cambridge 9609 | Topic 9.1.1
Where you locate determines what you pay, who you hire, and how customers perceive you.
The Boardroom Brief
Strategic Scenario: GlobalTech Expansion
GlobalTech produces consumer electronics. Currently, all manufacturing is in Silicon Valley (California), where average wages are $28/hour and land costs $2m per facility. The board is debating three options:
Offshore to Vietnam: Wages $2/hr, unstable regulation, 8-week shipping to US markets.
Reshore to Texas: Wages $18/hr, stable regulation, government grants available, "Made in USA" branding.
Stay in California: Premium talent, innovation hub, but costs rising 8% annually.
Quantitative Factors
- Cost of Land: Urban premium vs rural savings
- Labour Rates: Wages, social costs, productivity
- Transport Costs: Distance to market, infrastructure
- Government Grants: Regional incentives, tax breaks
Qualitative Factors
- Quality of Life: Staff retention, recruitment
- Image of Area: Brand perception, customer trust
- Political Stability: Legal protection, predictability
- Skilled Labour Pool: Training costs, innovation capacity
Cambridge 9609 AS & A Level Business | Strategic Decision-Making Framework
Master location strategy through quantitative analysis and qualitative judgement.
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