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In this section we look at the issue of location, which may be a national and/or international decision. Increasingly even small firms are outsourcing work to other countries to gain cost advantages and production has become increasingly globalised. Many industries have become essentially 'footloose' - able to locate anywhere that may help them to gain a competitive advantage.

The decision on location of a new firm may be critical to its survival, development and growth. Where to locate a business is a crucial decision because this will have an important impact on profits. Typically businesses will seek locations that maximise revenues and minimise costs.