Business Relocation Factors Logistics Taxation Analysis

My colleague highlights some of the reasons that inform a company’s decision to relocate. Most of the reasons given apply to a wide range of enterprises. To begin with, it is important to note that as my colleague observes, logistics happen to be one of the factors taken into consideration in relocation or transition decisions. This is a point of view reinforced by XXXX who indicate that “an important element in designing a company’s supply chain is the location of its facilities” (433). Towards this end, it should be noted that an automaker could relocate to a region or jurisdiction where most of its customers reside. One other reason that has also been highlighted by my colleague is pursuit of more favorable tax regimes. This could be deemed as a business climate decision. To a large extent, tax rates affect a business’ bottom line. For this reason, jurisdictions that offer a favorable taxation climate are likely to attract businesses keen on securing the wellbeing of shareholders.

In this particular write-up, my colleague begins by offering a robust definition of business relocation. My colleague then proceeds to highlight some of the factors that could influence relocation decisions. Some of the reasons highlighted on this front are inclusive of, but they are not limited to; the need to reach out to new markets, the desire to increase cash flows, the need to rein in costs, etc. In as far as the latter point is concerned, it should be noted that over the last few decades, most companies have moved their operations to China in an attempt to benefit from lower costs of production. Prior to relocation, however, there is need for enterprises to take into consideration various hidden costs in new locations. One such hidden cost, according to XXXX, happens to be customer base alienation as a consequence of relocating to locations that are far away from the primary customer base.