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Understanding Location Economies

The document discusses the importance of location economies, where firms perform value creation activities in optimal locations around the world to lower costs and differentiate products. It provides examples of major companies like Apple, Samsung, Sony, Harley Davidson, Shell, Nike, Adidas, Mercedes Benz, Hyundai, Honda, Yamaha, and BMW that take advantage of location economies by dispersing activities and manufacturing to locations with lower costs or greater perceived value to maximize profits.

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Glen Nazareth
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2K views16 pages

Understanding Location Economies

The document discusses the importance of location economies, where firms perform value creation activities in optimal locations around the world to lower costs and differentiate products. It provides examples of major companies like Apple, Samsung, Sony, Harley Davidson, Shell, Nike, Adidas, Mercedes Benz, Hyundai, Honda, Yamaha, and BMW that take advantage of location economies by dispersing activities and manufacturing to locations with lower costs or greater perceived value to maximize profits.

Uploaded by

Glen Nazareth
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
  • Location Economies Introduction
  • Importance of Location Economies
  • Case Study: Apple
  • Case Study: Samsung
  • Case Study: Sony
  • Case Study: Harley Davidson
  • Case Study: Shell
  • Case Study: Nike
  • Case Study: Adidas
  • Case Study: Mercedes Benz
  • Case Study: Hyundai
  • Case Study: Honda
  • Case Study: Yamaha
  • Case Study: BMW
  • Conclusion

13-1

LOCATION ECONOMIES
SREEKUMAR MENON-14
13-2
Why Are Location
Economies Important?
Location economies are economies that arise
from performing a value creation activity in the
optimal location for that activity, wherever in the
world that might be
By achieving location economies, firms can
Lower the costs of value creation and achieve a low
cost position
Differentiate their product offering

13-3
Why Are Location
Economies Important?
Firms that take advantage of location
economies in different parts of the world,
create a global web of value creation
activities
Different stages of the value chain are
dispersed to locations where perceived value
is maximized or where the costs of value
creation are minimized

13-4
APPLE
Designed in California
Made in China
13-5
SAMSUNG
Manufactures in India in Noida
Uttar Pradesh and in Chennai
Manufactures 3D, LED and LCD
television sets
13-6
SONY
Sony LCD panels made by a
Taiwanese manufacturer
13-7
HARLEY DAVIDSON
Original plant is in Milwaukee
Wisconsin, United States


It has setup plant in Bawal,
Haryana, its only manufacturing
Plant outside the United States

13-8
SHELL
Operates in more than seventy
countries
92000 employees
1.96 million tones of LNG
sold during the year
3.2 million barrels of oil
equivalents we produce
everyday
13-9
NIKE
Nike has 24 factories in India
More than 25000 workers
13-10
ADIDAS
China: 337 factories
India: 99 factories
Indonesia: 79 factories
Vietnam: 76 factories



13-11
MERCEDES BENZ
Its largest research and
development center outside
Germany with the launch of its
Bangalore R&D center in 1996


It currently employs over 1200
people and plans to increase
the number to 1700 by 2017
13-12
HYUNDAI
Hyundai entered Indian market
in 1996
Hyundai has become the
second largest automobile
manufacturer in India
Manufacturing unit in Chennai,
output of 300000 cars per year
13-13
HONDA
Honda is the largest
producer of two
wheelers in the world
Plant in Manesar, Gurgaon,
Haryana has a production of
1.65 million units
Second plant in Tapukara,
Alwar, Rajasthan has a
production of 2.8 million
units
13-14
YAMAHA
Manufacturing facilities in
India are at Faridabad,
Haryana and at Surajpur
Uttar pradesh
Yamaha made its foray into
Indian markets in 1985, the
Surajpur plant has a capacity
of producing 1 million
motorcycles a year
13-15
BMW
BMW India Pvt Ltd has its
headquarters at Gurgaon
Haryana
It has a manufacturing facility in
Chennai
It produces 11000 units per year
13-16
THANK YOU

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