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Business Studies LocationBreakeven - Essay Example

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Deciding upon where to locate the next business or to shift an existing facility is one of the most important decisions that an organization makes due to its connectivity with a variety of business factors. A business might want to decide on a new location because
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Download file to see previous pages Also inventory would not need to be stored thus stock holding costs would also be reduced. (Unit 88)
Having the suppliers close by is important, having the customers nearby also matters. The business revenue directly depends on the location which is easily accessible to the customer. Also it should be at such a place where the flow of customers is high or the population density is high so that the business product is exposed to the customers as much as it can.
The transport network plays a vital role in selecting a location. The raw materials need to come via a transport route. The customers have to visit the storefront and purchase the product. Therefore the road network in the immediate vicinity needs to be good. Furthermore the location should be at such a place where train/ship/plane network is close by so that connectivity to local and international business centres is maintained. (Business Review, 2003)
The actual piece of land selected for locating the business needs to be seen from the cost point of view as well. There should be room for future expansion. For customer storefronts, spacious land with space for car parking is sometimes required. The geological stability of the land area also needs to be considered as well as the knowledge of high seismic activity zones near the area. The use of Greenfield and Brownfield sites are being increasingly used in the UK. (Unit 88)
For a new business finding an area where skilled labour is available is also one of the factors to be considered since the skills required for the job are not always available in the locality. For an existing business moving to another location has the problem of persuading the existing employees to start coming to the new facility. They might have to relocate their homes, or change their office hours due to traffic etc. which might cause inconvenience. (Business Review, 2003)
Government Influence
The government of some counties may give incentives, like low priced land, to businesses to locate in some areas. The government may want to keep industries only in industrial areas and give incentives such as subsidized land and labour rates etc. (Unit 88)
Most storefronts bank on the type of area where they are located. For a branded store, having an outlet in the posh area of the city makes sense. Thus a business wanting to create an impression and keep its status high in order to charge premium prices from the customers would need to locate in expensive localities. (Business Review, 2003)
Hassle of Relocation
When the business moves to a different area, a certain bit of disruption is caused to the business activities. The suppliers may not want to come to the new location. The employees would have to change their routine or even relocate themselves. The ...Download file to see next pagesRead More
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