MGMT 420_6.3 Assignment.docx - Running head LOCATION...

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Running head: LOCATION DECISIONS 1 Location Decisions 6.3 Assignment Embry-Riddle Aeronautical University
LOCATION DECISIONS Apple Inc Apple Inc. (Apple) was founded on 1976 by Steve Jobs and Steve Wozniak, who dropped out of college. They set up the company with a vision to change the way people think about computers, and wanted to make computers that were user-friendly. Thus, Jobs and Wozniak began from building computers, to developing the world’s first computer with color graphics, which brought Apple to public in 1980 (Richardson & Terrell, 2008). Today, Apple is based in Cupertino, California, and designs, produces, and sell mobile communication and media devices such as iPhone; personal computers such as Mac; and portable digital music players such as iPods. Apart from these products, Apple also markets a wide range of related software, accessories, services, as well as third-party applications and digital contents (AAPL.O, n.d.). Therefore, this paper will discuss the seven major factors that will affect the location decisions made by Apple Inc, and provide recommendation on the best country to relocate to if the company is expanding. Seven major factors that affect location decisions Labor productivity The first major factor that affects the location decisions of a company would be labor productivity. According to Bakas, Kostis, and Petrakis (2019), productivity is one of the most critical contributing factor to economic growth, and boosting of productivity can increase the country’s success to improve their economies due to higher outputs. However, if the country’s labor productivity is weak due to factors such as poor education or work habits, the economy of the country will also be weakened, thus affecting companies in the country as well. Exchange rates and currency risks 2
LOCATION DECISIONS Exchange rates and currency risks affects the location decision as it may affect the investment value of the company due to changes in the currency involved (Ganti, 2019). Companies can take advantage of favourable exchange rates by relocating their companies to these countries to grow their money (Heizer, Render, & Munson, 2017, pp. 342). However, the values of the currencies may fluctuate due to issues such as interest rates and economic growth. For example, when the United Kingdom (UK) voted to leave the European Union (EU) in 2016, the value of British Sterling pounds lost approximately 20% of its value. This meant that the same amount of British pounds is worth lesser as compared to pre-Brexit (Inman & Davies, 2019). Therefore, companies should evaluate if the exchange rates and currency risks of a country before deciding to relocate as it may affect their savings or funds.

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