GMAT Essays (AWA)

Analysis of an issue:

Question:

"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 others kinds of technology becomes."

My response:

The issue of determining whether location is important for a business's success is a contentious one. On one hand, some people think location is quite important for a business that aims to succeed and on the other hand, some people think location is not quite important in an age in which much business is conducted online over the Internet. Nevertheless, on a closer look, I believe that location indeed plays a major role in the success of a business. There are several reasons to support my belief.

One reason is that businesses often depend on suppliers who provide the raw material or vendors who take away produced goods from its factories to the market. If the location that the business is in is not well connected or accessible to the rest of the eco-system, both the processes stated become expensive to the company. A business may have to compromise on its quality of products if it starts looking for cheaper options. If quality is not good, chances are that its products are likely to appeal to a few. Clearly then, location plays an important role in a business's success.

Another reason is that a business also needs energy and infrastructure for it to function, let alone succeed. If the business is located in a place where electricity is expensive, or placing such infrastructure becomes difficult, it cannot operate effectively and produce goods or services without increasing costs. I believe this is the reason why businesses anywhere are not located on hills or in deserts unless the entire city itself is at such places. Infrastructure is key to a business's success and a good choice of location can surely help a business succeed.

Perhaps the best reason is that a business must target the local market to be successful. For instance, it would be foolish to open KFC in a community with a majority of vegetarians. Such a business is more likely to fail than succeed. Hence, location is important for a business to succeed.

One may argue that with Internet, the importance of location is not what it used to be. This may be true to some extent but a business running on the Internet still requires basic infrastructure to run its business and deliver its goods or services. Such a business is not likely to succeed if it is situated in a wrong location, away from its target market.

In summary, I believe that importance of location is not likely to change because of the effect a location can show on a business's backbone: infrastructure, supply of raw materials and delivery of finished goods or services. Even if a business starts off with a poor choice of location, eventually, it has to move to a better location to succeed.