The choice of location as a strategy of the firm

Scott Cunningham, Fernando Palop Marro

Research output: Contribution to journalEditorial

Abstract

In this paper, HP announced it would develop a world 3D printing center in the Greater Barcelona area of Spain. The technology, 3D printing, is considered by many to be a transformational technology which could revolutionize manufacturing. The center will be a major R&D laboratory for HP world-wide. The case of HP printers in Barcelona reveals important issues about strategy and location from which many companies can learn In the classical view, location is simply an input into production. Locations are chosen which minimize cost-cost of labor, cost of production, cost of logistics, access to customers, and access to suppliers. The consequences for operations management are clear. Companies outsource and off-shore key facilities. Such facilities often go to where the lowest cost, sufficiently qualified supply of labor is to be found. The drawbacks to this perspective are also clear. The developed world faces an exodus of highly paid manufacturing work. There are also concerns about securing supply chains to ensure quality standards are met. And finally, there are environmental costs borne from shipping goods across the world instead of building them locally where the customers may reside.An alternative perspective increasingly emphasizes the stickiness of place. Industrial districts are places where knowledge can be rapidly shared, where joint capabilities are built, and where spillovers from innovative activities can be shared between companies.
Original languageEnglish
Pages (from-to)7-8
Number of pages2
JournalIEEE Engineering Management Review
Volume42
Issue number4
DOIs
Publication statusPublished - 27 Nov 2014

Keywords

  • companies
  • educational institutions
  • manufacturing
  • three-dimensional displays
  • supply chain management
  • quality management
  • environmental factors

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    Cunningham, S., & Palop Marro, F. (2014). The choice of location as a strategy of the firm. IEEE Engineering Management Review, 42(4), 7-8. https://doi.org/10.1109/EMR.2014.2364654