IV. The Place
Some countries are geographically disadvantaged. Recent studies have demonstrated how being landlocked or having a tropical climate carry a hefty price tag in terms of reduced economic growth. These unfavorable circumstances can be described as "natural discounts" to a country's price.
What can be done to overcome such negative factor endowments?
In classical microeconomics, element of "place" in marketing plan used to refer to locus of delivery of product or service. Well into 19th century, "place" was identical to region where product was manufactured or service rendered. In other words, textiles weaved in India were rarely sold in Britain. American accountants were unlikely to practice in Russia. Distribution was a local affair and networks of dissemination and marketing were geographically confined.
A host of historical and technological developments drastically altered scene and frayed straitjacket of geography.
The violent disintegration of old system of geopolitical alliances led to formation of massive, multiplayer trading blocs within which and among which movement of goods and, increasingly, services is friction-free.
The vast increase in world's population - matched by exponential rise in purchasing power - created a global marketplace of unprecedented wealth and a corresponding hunger for goods and services. The triumph of liberal capitalism compounded this beneficial effect.
The advent of mass media, mass transport, and mass communications reduced transaction costs and barriers to entry. The world shrank to become a veritable "global village".