Why firms opt for localization
- The need for some firms to get raw materials from other firms.
- The desire to get access to cheaper power.
- Need to get market for commodities.
- Need to share in skilled labour, already provided by existence of other firms
- Due to industrial inertia.
- Need to share services like roads, security, storage, banks etc..
- It may be a government policy
- Where both old and new firms are under one management e.g Madhivan.