8 julio, 2024

Macrolocation: concept, factors, what it is for, examples

What is macrolocation?

The macrolocation of a project or company it consists of deciding the most advantageous region where a company or business will be located; describes the general geographic area in which a project will be located. Cities and regions arise through the symbiosis of benefits that are generated from the grouping of companies and people.

Therefore, a functional macroeconomic situation serves as the basis for making property locations attractive and is therefore a prerequisite for an investment. For this reason, macrolocation analysis is extremely important.

The analysis is not useful only in the context of the investment decision. Rather it is advisable to make constant reviews of the macrolocation for investors and owners.

Generally, the relative importance of the macro location with respect to the micro location increases as the size of the project and ownership increases.

factors

In the macrolocation of a project or company, the following factors must be taken into account:

geographic

They are those related to the natural circumstances that prevail in the different regions of the country, such as weather conditions, levels of environmental waste and pollution, and actions to prevent environmental contamination.

They also include the characteristics and availability of communication routes (air routes, highways and highways, railways, etc.), as well as the state of these routes.

Likewise, it takes into account the availability of the land, insofar as it has an adequate surface due to its topographical characteristics and whose costs are reasonable.

Social

They are related to the adequacy of the project to the community and the environment. These factors are rarely addressed, but they are no less important for this.

Specifically, they refer to development trends in the region, the general level of social services and living conditions that the community has, such as hospitals, schools, cultural facilities, recreational centers and employee training centers.

The attitude of the community towards the establishment of the company and the interest of social and community forces are also taken into account.

economic

They correspond to the costs of inputs and supplies in that place, such as raw materials, labor, electricity, water and fuel.

On the other hand, it considers the usable infrastructure, as well as the proximity of raw materials and consumer markets.

The availability of the different means of transportation (vehicles, buses, trains) must be taken into account, in addition to their costs, as well as the availability of communications, in terms of telephone lines and Internet access.

Institutional

They are related to strategies, plans or development programs, norms, regulations and specific regulations on industrial decentralization.

It takes into consideration regional laws and policies, infrastructure of public services, the impact of the project on the environment and the approval of the corresponding institutions for the license.

Tangible and intangible factors

A distinction must be made between tangible and intangible location factors. After determining the macro-location structure, which depends on the location and the corresponding type of use, the following key location factors are analysed:

Population structure (for example, migratory trends).
Age, income and household structure.
Employment and economic development.
Degree of diversification of the local economic structure.
Public institutions (ministries, courts, etc.).

In addition to tangible location factors, the results of which can often be objectified, intangible ones are also important. For example, the image people have of the location should also be examined in the analysis.

What is macrolocation used for?

The macrolocation of a project or company is intended to find the most favorable location for the project, determining the most relevant socioeconomic indicators and physical characteristics, in such a way that it covers the requirements or demands that help reduce investment costs.

In the same way, this found location should contribute to minimizing expenses and operating costs during the entire productive period of the project.

The previously arduous process of evaluating possible country locations has become more and more about objective data analysis and less about fieldwork.

Very specific criteria can be set for the site search. For example, you can define a site in a community where the workforce is made up of at least 25% youth under the age of 30, but no more than 50%.

You can specify a site that is no more than 10 kilometers from a given provider or no more than a day’s drive from at least four customers. Much of this relevant information is available from public sources.

Select the optimal location

After the data from all available sites is analyzed, using the specified criteria, a list can be generated that ranks the sites based on a score, essentially rating how well each site matches the criteria.

The locations with the best ratings will form a short list with the best options. From there, the localization team can evaluate them and use other resources to help select the optimal localization from the list.

Examples of macrolocation

1. Restaurant

The factors that were taken into account when deciding where to install a restaurant project in the Aragua region, in the city of Cagua, were the following in terms of macro-location:

type of place

Based on a previously carried out investigation, it was concluded that the city of Cagua does not have a restaurant that offers the typical gastronomy of the region.

investment amount

The amount of the investment is $30,000. This amount will be used to equip the property. It is not necessary to spend on the purchase or rent of the land, as it is owned by the restaurant.

State of communication channels

The main access road to the city of Cagua is the national highway, which is in good condition.

There is also the intercommunal highway, where you can get to the city of Cagua passing through the city of Turmero. This road is dirt, which makes it passable but go slowly and carefully.

Another of the accesses to Cagua is also through the intercommunal highway, but from the city of La Villa. This road is paved, which makes it passable.

The tourist destination of La Victoria is 10 km away from Cagua, and Maracay is 18 km away.

Services

The city has electricity, drinking water, telephone communication and fairly stable Internet access.

2. Other examples

McDonald’s operates in 25 countries around the world, with more than 30,000 restaurants. Google, the search engine, has domains in 165 countries and 21 dependencies. It has various offices in Latin America, Europe, North America, Asia Pacific, Africa and the Middle East. Apple has more than 500 stores around the world. Nike has more than 1,100 stores spread around the world.

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