¶ … Proximity to Major Markets
When they first emerged, the economic agents relied their success and profits on the ability to manufacture and deliver the products needed by the population. Gradually however, the success of the business institutions became more sensitive to a wide array of other issues. Today then, it is insufficient for the companies to simply deliver the needed products and services, but they must anticipate and serve new needs, even before the customers themselves become aware of these needs. The companies must also attract their customers through elaborated marketing campaigns and they must embrace, empower and reward their staff members.
Aside from these, the economic agents must also pay close attention to the place where they locate their businesses. The importance of the business location is critical for the final success of the company as it defines the means in which the customers will have access to the company's products and services. For instance, it is necessary for the business to be located in a highly populated area, where a wide number of customers have access to the stores. Then, the location must be easily accessible by various means of transportation.
In these days of intensifying competition, the economic agents are forced to devise points of difference by which to better appeal to their growingly pretentious customer base. The location of the business represents one source of differentiation and creation of competitive advantages and it has been more frequently addressed within the specialized literature.
Les J. Cramer (2006), senior manager at Studley Inc. is one professional who argues on the importance of location. He found that a growingly important criterion in the selection of the adequate location is represented by the proximity to major markets. The starting point of the discussion was represented by the 2005 Annual...
This change indicates that corporate executives strive harder to locate their operations next to major markets.
"In the latest survey, several ranking changes have occurred -- including the one for proximity to major markets, which has jumped from 14th in 2004 to 9th in importance in 2005. This also represents a 14% increase in weighted significance. The response is very clear: Closeness to market is now of major importance to corporations as they consider where to locate their facilities" (Cramer, 2006).
This evolution of the importance of a proximity to the major markets is the result of changing market features, which in turn, generate changes within corporate decision making efforts. Still, what is also important to note is that the very meaning of the major market proximity is in itself of a changing nature. Specifically, Cramer argues that the proximity to a major market would mean different things to different economic agents. For a manufacturer for instance, major market proximity could reflect a proximity to customers or a proximity to a supplier; in the case of an office however, the major market proximity could refer to the ability of the company to provide services in the same time zone (Cramer, 2006).
Les Cramer then approaches the issue of the role played by the customers in the corporate location decision and finds that this role in indeed critical.
"Although a company's location criteria and business model change over time, it is really the customers who establish broad location strategy. Furthermore, the…
