This report provides basic knowledge about important factors which have to be observed when starting a business.
First the report gives an impression why the right choice of a business location is so important for the future success of an enterprise. It shows examples of mistaken choices of locations which lead to disadvantages of a company.
Furthermore the most important site-related factors which are crucial for the ultimate decision are split into two categories, the hard and the soft site-related factors. It is explained in how far these factors impact the potential companies’ advantages. A short concrete example will show how the individual locations can be assessed to find the ideal location for a specific branch.
In addition the model of Michael Porter’s Diamond explains how the international success in a certain branch depends on four general characteristics: Factor Conditions; Firm Strategy, Structure and Rivalry; Demand Conditions and Related and Supporting Industries which can boost or constrain the creation of competitive advantage and also shows the relevance of the influence of chance and government.
After stating the theory, chapter six gives a short overview about Germany’s competitive advantages and disadvantages.
The last chapter will analyse the German company Beiersdorf, which is located in Hamburg, by means of Porter’s Diamond. Likewise the site-related factors of Hamburg are analysed. This analysis is about Beiersdorf because it is a worldwide successful company and the report will discover why the company is so successful and if it depends on the choice of location.
As this report is restricted to a short number of pages, the research is a brief realisation of the previous stated theory.
Finally the conclusion will state the most important facts and a critical acclaim about the research.
Table of Contents
1. Introduction
2. The Exigency of a Location Study
3. Location Study
3.1 Hard Site-Related Factors
3.2 Soft Site-Related Factors
3.2.1 Soft, Company Related Factors
3.2.2 Soft, Individual Related Factors
3.3 Continuum of Hard and Soft Site-Related Factors
4. Identifying the Ideal Location
5. Porter’s Diamond
6. Germany as a Location
7. Analysis of Beiersdorf
7.1 Porter’s Diamond
7.2 Site-Related Factors of Hamburg
8. Conclusion and Critical Acclaim
Research Objectives and Key Topics
This report provides a fundamental guide for start-ups and entrepreneurs on the critical factors involved in selecting an ideal business location to ensure long-term success. It explores the categorization of site-related factors and utilizes Michael Porter’s Diamond model to evaluate competitive advantages, culminating in a case study of the company Beiersdorf and the city of Hamburg.
- Methodologies for categorizing and assessing hard and soft site-related factors.
- Application of Michael Porter’s Diamond model to analyze national and corporate competitiveness.
- Assessment of Germany's competitive advantages as a business location.
- Practical case study of Beiersdorf and its synergy with the location of Hamburg.
Excerpt from the Book
3. Location Study
This chapter deals with the various types of site- related factors. These factors will be cut into two categories, the hard (quantitative) and the soft (qualitative) factors. These factors will be explained in detail.
The following paragraphs are based on B. Grabow (2004, pp. 2-5), who said that: “Site related factors are in general characteristics which define the attractiveness of a location rather a region for an enterprise. The quality of a location has an effect of the choice of location of already settled companies or those which are willing to settle. The improvement of the location quality is hence a means for securing the presence of already settled Companies (“portfolio maintenance”) and also for the recruitment of new companies”.
As a rule, site-related factors are subdivided into hard and soft factors.
3.1 Hard Site-Related Factors
Those factors which are directly measured in costs and which will be also included in the enterprises’ balance sheet are described as hard site-related factors. They are quantifiable structural data about a region and its environment e.g. traffic infrastructure, sociodemographical criteria, political administrative advantages and disadvantages, the availability of raw materials, transport costs, distribution and labour costs, estate costs and taxes and duties. These factors have a heavy effect on the corporate activity.
Summary of Chapters
1. Introduction: Outlines the importance of site selection for business success and introduces the research structure, including the use of Porter’s Diamond model and the Beiersdorf case study.
2. The Exigency of a Location Study: Explains the strategic necessity of thorough location planning to prevent competitive disadvantages and avoid common start-up failures.
3. Location Study: Details the classification of site-related factors into hard (quantitative) and soft (qualitative) categories and their specific impacts on business operations.
4. Identifying the Ideal Location: Presents an evaluation grid methodology that allows businesses to weight and rank potential locations based on specific branch requirements.
5. Porter’s Diamond: Introduces Michael Porter’s theoretical framework for analyzing national competitiveness and the factors that create a successful business environment.
6. Germany as a Location: Analyzes the competitive strengths of Germany as a business hub, highlighting infrastructure, innovation, and international market reputation.
7. Analysis of Beiersdorf: Applies the theoretical models to the real-world example of Beiersdorf, examining how the location of Hamburg contributes to the company's success.
8. Conclusion and Critical Acclaim: Summarizes the key findings and reiterates that selecting the right location based on rigorous analysis is vital for enduring corporate success.
Keywords
Location study, site-related factors, start-up, business success, competitive advantage, Porter’s Diamond, Hamburg, Beiersdorf, hard factors, soft factors, infrastructure, innovation, Made in Germany, location analysis, investment.
Frequently Asked Questions
What is the primary focus of this publication?
The work focuses on the strategic importance of choosing an ideal business location and provides a framework for analyzing the factors that influence this decision to ensure long-term success.
Which core thematic areas are covered in the report?
The core themes include the distinction between hard and soft site-related factors, the methodology for location evaluation, and an application of Michael Porter’s Diamond model to explain competitive advantages.
What is the main objective of the study?
The primary objective is to serve as a guide for start-up companies and entrepreneurs, teaching them how to systematically assess locations to avoid costly mistakes.
What scientific methods are utilized?
The author employs a literature-based analysis combined with the application of the "Porter’s Diamond" model and a practical, weighted evaluation grid to assess specific site criteria.
What topics are discussed in the main body?
The main body covers the theoretical definition of site factors, the continuum between quantitative and qualitative requirements, and a concrete case study analyzing Beiersdorf within the context of Hamburg.
Which keywords best characterize this work?
The most relevant keywords are location study, site-related factors, competitive advantage, Porter’s Diamond, Beiersdorf, Hamburg, and business infrastructure.
How does the author specifically evaluate Hamburg as a business location?
The author evaluates Hamburg by analyzing its hard factors, such as transport connectivity and infrastructure, alongside soft factors like cultural richness, quality of life, and the presence of academic research facilities.
How does the case of Beiersdorf illustrate the theoretical framework?
Beiersdorf serves as an example of how a globally successful company leverages local qualitative factors (like innovation clusters and collaboration with universities) and institutional support to maintain a competitive advantage.
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- Sandra Spindler (Autor:in), 2009, Correct Choice of Location as a Factor of Success, München, GRIN Verlag, https://www.grin.com/document/152498
