Location economies are the economies that arise from performing a ________ activity in the optimal location for that activity.

Question

Quizplus · Accepted Answer

Location economies are the economies that arise from performing a value creation activity in the optimal location for that activity, wherever in the world that might be. For a firm that is trying to survive in a competitive global market, basing each value creation activity it performs at that location where economic, political, and cultural conditions are most conducive to the performance of that activity will provide benefits to the firm. As firms pursue location economies, they may also be in the process of creating a global web of value creation activities, with different stages of the value chain being dispersed to those locations around the globe where perceived value is maximized or where the costs of value creation are minimized.

Location Economies Are the Economies That Arise from Performing a ________