Decrease in the Importance of Location
The combination of inexpensive data storage, transmission. and retrieval costs coupled with electronic access to virtually every corner of the world has decreased the importance of location for many services. Online banking
services reduce the need for a customer to go to the bank. Home delivery services for groceries, dry cleaning, and so forth eliminate the need for customers to visit these retail locations. Similarly, any purchase made on the Internet, whether it is a book from Amazon.com or airline tickets from Expedia.com, eliminates the need for the customer to visit a specific retail location that offers these goods and services. When such services can be conducted remotely. it doesn’t matter where they are located as far as the customer is concerned.
The continued development of a worldwide communication network has facilitated the location of back-office service operations to areas where labor costs are relatively inexpensive, As a result, customer call centers can be located anywhere, For example. a U.S. airline has one of its reservation call centers located in the Caribbean. while the customer call center for a major bank in the middle Atlantic states is located in Maine. For the Arneb reasons. many firms have their call centers located in Ireland, It is important to note. however. that in addition to providing low-cost labor. these locations also must have the necessary communication infrastructure in place to provide the level of service required by these
firms.
