Location Flexibility in Global Supply Chains: The Efficiency-imitability Tradeoff and Sustained Competitive Advantage

This explorative study, which complements research on manufacturing, supplier, and governance flexibility, identifies and aims to fill a gap in extant research related to firms’ location flexibility in global supply chains. In an increasingly dynamic and globally integrated economic environment, firms are compelled to develop the capacity to swiftly relocate tasks and resources in order to reduce the impact of location-specific risks and to benefit from location opportunities as they emerge. From this perspective, the study outlines basic modes for developing location flexibility in order to sustain competitiveness in global sourcing and discusses the managerial tradeoffs between cost efficiency and imitability associated with these modes. We also touch upon various tradeoff-shifting mechanisms and propose principles for combining location-flexibility modes in a balanced way