Corporate Geography [electronic resource] : Business Location Principles and Cases

457 Pages·1995·41.4 MB·English

by  Laulajainen, Risto

Corporate Geography
The GeoJournal Library
Volume 31
Series Editor: Wolf Tietze, Helmstedt, Germany
Editorial Board: Paul Claval, France
R. G. Crane, U.S.A.
Yehuda Gradus, Israel
Risto Laulajainen, Sweden
Gerd LOttig, Germany
Walther Manshard, Germany
Osamu Nishikawa, Japan
Peter Tyson, South Africa
The titles published in this series are listed at the end of this volume.
Corporate Geography
Business Location Principles and Cases
by
RISTO LAULAJAINEN
Department of Human Geography,
Gothenburg School of Economics,
Sweden
and
HOWARD A. STAFFORD
Department of Geography,
University of Cincinnati,
U.S.A.
SPRINGER-SCIENCE+BUSINESS MEDIA, BV.
A C.I.P. Catalogue record for this book is available from the Library of Congress.
ISBN 978-90-481-4512-6 ISBN 978-94-017-1181-4 (eBook)
DOI 10.1007/978-94-017-1181-4
Printed on acid-free paper
All Rights Reserved
© 1995 Springer Science+Business Media Dordrecht
Originally published by Kluwer Academic Publishers in 1995
No part of the material protected by this copyright notice may be reproduced or
utilized in any form or by any means, electronic or mechanical,
including photocopying, recording or by any information storage and
retrieval system, without written permission from the copyright owner.
For Teresa and Mary Ann
CONTENTS
page
PREFACE XI
1. INTRODUCTION 1
1.1. Purpose and scope 1
1.2. Emphasis on cases 3
1.3. Delimiting the field 4
1.4. Organization of the book 6
2. LOCATION FACTORS 15
2.1. Location concepts 15
2.2. Material inputs 17
2.3. Labor 21
2.3.1. Availability 21
2.3.2. Wages and fringes 25
2.3.3. Productivity 29
2.3.4. Skills 35
2.4. Site characteristics 36
2.5. Governmental influences 38
2.6. Business climates and quality of life 49
2.7. Closeness to markets 52
2.8. Summary 59
3 . LOCATION DECISIONS 61
3.1. Frictions of distance and economies of scale 62
3.2. Opening plants and stores 75
3.2.1. Maximum access 77
3.2.2. Simple transport cost model 92
3.2.3. Heuristics for several plants 95
3.2.4. Optimum for several plants 96
3.2.5. Comprehensive comparative cost solution 100
3.3. Divesting plants and stores 113
VII
VIII CON1ENTS
3.4. Summary 118
4. TERRITORIAL STRATEGIES 121
4.1. The corporate context 121
4.1.1. Motivations and mechanisms 122
4.1.2. Timing territorial adjustments 131
4.2. Where to expand? 141
4.2.1. In situ 141
4.2.2. Elsewhere 143
4.2.3. International entry sequences 149
4.2.4. Domestic entry sequences 157
4.3. Contraction 167
4.4. Three strategic models 172
4.5. Summary 175
5. PRODUCTION SYSTEMS 179
5.1. Functions and linkages 179
5.2. Sourcing 182
5.2.1. Make or buy? 182
5.2.2. Just-In-Time (JIT) 185
5.2.3. Purchaser's angle 188
5.2.4. Supplier's angle 199
5.3. Internal structure 208
5.3.1. Car assemblers 209
5.3.2. Other assemblers 228
5.3.3. Process industries 237
5.4. Area charters 253
5.5. Summary 264
6. RESTRUCTURING 267
6.1. Framework 267
6.2. Molnlycke 270
6.3. Whirlpool 275
6.4. Electrolux 279
6.5. Kaukas 282
6.6. Cementa 286
6.7. May Department Stores 289
6.8. Summary 297
7 . ADMINISTRATION 299
7.1. Organizational principles 299
7.1.1. Organization types 299
7.1.2. Functional organization 302
7.1.3. Area organization 305
CON1ENTS IX
7.1.4. Divisional organization 308
7.1.5. Matrix organization 313
7.1.6. Refinements 319
7.2. Organizing sales spaces 321
7 .2.1. National territories 321
7.2.2. International territories 330
7.3. Office location 341
7.3.1. Headquarters 341
7.3.2. Regional offices 349
7.4. Research and development 353
7.5. Communication 361
7.5.1. Networks 361
7.5.2. Contact patterns 371
7.6. Summary 374
8. COMPETITIVE STRATEGIES 379
8.1. Tools and types 379
8.1.1. Oligopolistic and dynamic 379
8.1.2. Competitive tools 382
8.1.3. Typology 389
8.2. Applications 393
8.2.1. Active defense 393
8.2.2. Predation and preemption 395
8.2.3. Matching and catching-up 398
8.2.4. A voidance 407
8.2.5. Collusion 415
8.2.6. Competitive diversity 418
8.2.7. Geographical bias 423
8.3. Summary 430
9. EPILOGUE 433
REFERENCES 437
COMPANY INDEX 445
PREFACE
This book is about the spatial organization and behavior of large
business corporations. It focuses on the places where companies
operate stores, factories, and offices. The emphasis is on individ
ual business firms, rather than industries, and the usual di
chotomy into manufacturing and retail geography is largely
smoothed over. This leads to a uniquely integrated discussion.
There are good operational reasons for combining the two. Man
ufacturers often find it necessary to build their own distribution
networks and sometimes become retailers. Retailers, in turn,
may open manufacturing plants. Also, the spatial concerns of
manufacturers and retailers partially overlap, which leads to a
convergence in the way location decisions are made. There are
clear parallels in the patterns of manufacturers and retailers.
Differences mainly appear in activities which are specific for
manufacturing, such as material flows between production
stages.
Concepts, models and theory are employed to provide struc
ture to the discussions. The emphasis, however, is on how actual
business corporations behave. This is achieved by references to
some 250 companies. Efforts have been made to find examples
across wide factual, geographic and temporal spectra. Major ef
forts have been made to discuss each important facet of corpo
rate spatial behavior. By contrast, no effort has been made to use
only current examples or update all the cases; indeed, it is useful
to observe operations of decades ago relative to those of the
1990s. The identified companies mainly operate internationally,
and are headquartered in North America, Western Europe, and
Japan. They are consequently not a representative sample of all
large corporations. Not all industries are represented either, and
some, like the car industry, are overrepresented, reflecting both
its importance and availability of data.
XI