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ddo · Thu Sep 18, 2008 12:01 pm

"Location has traditionally been one of the most important determinants of a business's success. The importance of location is not likely to change, no matter how advanced the development of computer communications and other kinds on technology becomes"

The issue of wether the location of a businees is an important determinant of a business success is a controversial one. On one hand more and more we live in an intercomunicated world, where locations are getting closer and changes faster. On the other hand, companies' selection of location will have a big impact on costs and companies' culture. However, in the final analysis of the issue I belive that the location is not a relevant factor in a business success.

First, during the last decades we can observe a clear trend on companies selection of location. All big multinationals such as Nike, IBM, Apple, just to name some, have opened offices in China, India, Vietnam, etc. opening their market and widening their presence world wide. There are hardly any national business anymore. Therefore, companies looking for business are more seeking for temporal benefits and are flexible to move where these benefits or better conditions are.

Second, the only constant is the change, nothing remains the same for too long. For example, in Montevideo, the city where I was born, people used to live down town because it was more convenient, safe and clean. Then down town became too crowded and dangerous and people started moving more to the suburbs, where nobody had interest before. Now subrubs are considered more convenient for living than down town. The same example applies for a business location, what made a location important or good for a business may change very fast.

Third, comunications nowdays are so developed that one can not talk anymore about distances. In all aspects as transports, communicatios, etc. locations are getting closer . There are so many airlines flying everywhere , so many on-line communities and ways to communicate (skype, netmeetings, etc) that it does not matter if the company is located in Asia or in South America.

Finally, it may be argued that the origin or location of a business may determine the market opportunities, as well as product positioning. For example, everbody associates BMW with Germany, and Germany with good quality. However, everybody knows that BMW is not completly produced in Germany.

In sum, however long time ago location could have been an important determinant of a business success, in the 21st century due to expanded communications and companies' need to constantly change and look for benefits, location is not relevant anymore.

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