What Are Location Advantages in International Business?

Five location advantages you should consider are trade access, consumer/market proximity, adjacent business communities, proximity to talent sources and lower costs.

Why is location advantage is important to international business?

Location-bound O advantages allow the firm to be able to generate profits from these assets, but only in a specific location. This may be due to government-induced incentives, such as privileged access to specific natural resources, capital, or specific infrastructure.

What is an example of a location-specific advantage?

For example, a lumber company in Oregon has a location-specific advantage to a lumber company in Arizona because there are simply more trees in Oregon. This makes it unlikely that the company in Arizona will be able to fill orders as well or as quickly as the company in Oregon.