LOCATION STRATEGY FOR BUSINESS
A new branch can be opened by big brands like Jollibee or Mercury Drug almost anywhere and expect people to come through the doors - but picking exactly the right location can mean much bigger profits. For a smaller business, knowing where to set up could make the difference between staying open and shutting down. But how do you work out where to open up? Location strategy can help. By understanding things like how people travel, you can identify which locations will attract the most customers - and that can mean big money in business. In the same way, your knowledge in geography can help to work out the best countries to expand into, or help to predict how changes in the economy that might affect a business’s future. It is also vital for businesses that are trying to become more environmentally friendly - so even if you’re more motivated by saving the planet than making money, there might be a place for you in the world of business. Strategic Locations for a Business
Finding the perfect location for your business is not an easy task. Some businesses don't rely on foot traffic while others rely on a place that has a lot of natural traffic, plenty of parking and is in an area that penetrates your target market. But there are many factors that go into finding the perfect space that involve the size of your business, the type of business and your budget for a space.
Where is the Competition?
For some businesses, such as a bookstore or small family grocery store, being close to a competitor is a bad thing especially if the competitor is bigger than you and can offer more selection or better prices. For other businesses, such as restaurants or shoe stores, being close to a competitor can offer an advantage. Having a restaurant near others allows people to go to one place and find something to eat. Of course, you don't want to be an Italian restaurant competing with an Italian restaurant. But if you offer a different type of cuisine or if one restaurant is too crowded, people will overflow to you or simply decide to try you for something different. Shoe stores and other retail providers can do well being near each other because shoppers like to shop and find the best deal. Staying close to competitors will have people going back and forth to find the better deal.
When you determine how large of a location you need, you will also have to take a close look at what you can afford. The corner of the busiest street may be an ideal location, but way out of your budget range. You will need to consider if it is more important to get a location on this street, albeit smaller, to have walk-in traffic improve or get a larger location, slightly off the beaten path, that highlights what you do. Hair salons often go with high-traffic areas, but if you are promoting a salon and spa, being slightly away from traffic will help your clients feel like they are getting away and improve the quality of their experience.
Being on the busy strip will drive walk-in traffic into your establishment. But if you are not somewhere people are walking, they need to have easy access to your building. If you are a lawyer or a certified public accountant, you will not need a lot of parking. Still, you will want a few spaces available for people to park during their appointments. You will not need to worry about an overflow parking area because the appointments regulate your incoming traffic. But if you are a retail provider, having ample parking is important. If people don't like the parking situation, they may keep driving until they find a place to park where one of your competitors happens to call home.
As for global companies the top five location factors are costs, infrastructure, labor characteristics, government and political issues, and economy. Key sub-factors are the availability and quality of the labor force, the quality and reliability of modes of transportation, the quality...
References: Spee, Roel, and Wim Douw. "Cost-Reduction Location Strategies." Journal of Corporate Real Estate 6, no. 1 (September 2003): 30–38
Karl Heil and R. Anthony Inman. “Location Strategy.” Encyclopedia of Business, 2nd edition: p462-464
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