Strategic Alliances

In order to build a global competitive advantage, activities might be required to concentrate in certain locations. For example, if costs of production or transportation are lower; if there is a possibility of scale economies or if there is a steep learning curve effect in certain locations, it would be beneficial not to disperse the activities. On the other hand, if it is necessary to be close to buyers; if transportation costs or trade barriers support the decentralization or if fluctuating exchange rates, supply interruptions, and adverse politics should be buffered, activities should be dispersed.