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Location Planning and Analysis
Location Planning and Analysis
Location Planning and Analysis
A business location is defined as a place or structure occupied by a firm to run its operations.
This includes any structure or establishment used in conducting a business. (Business Location:
Meaning, Examples & Strategies, n.d.)
A business location is simply a place or structure where a firm conducts its operations.
This can refer to any type of structure or establishment used for business purposes.
https://www.studysmarter.co.uk/explanations/business-studies/introduction-to-business/business
-location
Choosing the right business location is vital to business operations and success. Here are some
key benefits of a good business location:
Attract and retain workers with the required skills and talent.
Provide a balance between business costs and business revenues.
Offer the necessary infrastructure for your business growth. These infrastructures include a
good transport system, gas pipes, and road networks.
Position your business to fully benefit from government policies, grants, or loans.
Ensure the smooth running of your business operations.
Provide an ideal location to get enough traffic for your business or to keep your business
confidential.
Attract and keep employees who possess the necessary abilities and talent.
Achieve a balance between the expenses and revenues of your company.
Provide the essential framework for the development of your business, such as
transportation, gas pipelines, and road networks.
Position your business to take full advantage of government regulations, subsidies, or
loans.
Ensure that your business processes run smoothly.
Provide a suitable location that can generate enough traffic for your business or maintain
your business's confidentiality.
https://www.studysmarter.co.uk/explanations/business-studies/introduction-to-business/business
-location/
An ideal location is one where the cost of the product is kept to a minimum, with a large market
share, the least risk, and the maximum social gain.
An ideal location is characterized by low product costs, high market share, minimal risk,
and maximum social benefit.
https://www.studysmarter.co.uk/explanations/business-studies/introduction-to-business/business
-location
1. Demographics
2. Style of Operation
3. Nearness to Market and Foot Traffic
4. Accessibility and Basic Infrastructure
5. Competition
6. Zoning/Permit Issues
7. Proximity to other Businesses & Services
8. Image and History of the Site
9. Utilities and other costs
https://digest.myhq.in/factors-choose-right-business-location/
Challenges when selecting a business location (Selecting the Right Location | Berlin | Europe,
n.d.)
1. The chosen location does not meet key requirements for the new operation (for example,
workforce or utilities are not available in sufficient quantities or at the right costs).
2. Important location factors are overlooked, leading to cost-overruns or project delays.
3. There is internal disagreement about the importance of individual location criteria or the
choice of location and site.
4. Not enough time is allocated to the location selection, creating pressure that affects the quality
of the analysis.
5. Reliable data about key location factors is not available or the data is inaccurate or misleading.
6. The analysis is inconclusive and does not provide a reliable basis for choosing a location.
7. Governments do not honour commitments regarding infrastructure, incentives or other
support.
8. Cultural differences are overlooked or misunderstood in international projects
9. Challenges from third parties or other stakeholders cause the project to be held-up.
https://location-decisions.com/challenges/
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So, the choice is made only after considering the cost and benefits of different alternative sites!!!
That's where the Location planning and analysis phase comes into action.
https://www.iedunote.com/business-location-analysis#:~:text=The%20foremost%20objective%2
0in%20selecting,%2C%20regularly%2C%20and%20sufficiently%20available.
It helps businesses find the ideal location for opening their new offices, store locations, or
manufacturing units by analysing audience demographics, psychographics, brand affinities,
trade areas, pathing, and other important factors. Location analysis also accelerates the
decision-making process for organizations.
It assists businesses in selecting the best site for the launch of their new offices, retail
outlets, or manufacturing facilities by examining audience demographics,
psychographics, brand affinities, trade regions, pathing, and other crucial aspects.
Organizations' decision-making is accelerated by location analysis.
https://blog.near.com/marketing-advertising/the-importance-of-location-analysis-and-understandi
ng-location-based-advertising/#1-
Demographic, (It involves the study of population in the area in terms of total population (in no.),
age composition, per capita income, educational level, occupational structure, etc.)
Trade Area, (It is an analysis of the geographic area that provides continued clientele to the firm.
He would also see the feasibility of accessing the trade area from alternative sites.)
Competitive, (It helps to judge the nature, location, size, and quality of competition in a given
trade area.)
Traffic, (To have a rough idea about the number of potential customers passing by the proposed
site during the working hours of the shop, the traffic analysis aims at judging the alternative sites
in terms of pedestrian and vehicular traffic passing a site.) and
Site Economics (Alternative sites are evaluated in terms of establishment costs and operational
costs under this. Costs of the establishment are the cost incurred for permanent physical
facilities. Still, operational costs are incurred for running a business on day to day basis, they
are also called as running costs.)
https://www.iedunote.com/business-location-analysis#:~:text=The%20foremost%20objective%2
0in%20selecting,%2C%20regularly%2C%20and%20sufficiently%20available.
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For the FINAL conclusion: There are several ways that are very helpful in evaluating location
alternatives, such as locational cost-profit-volume analysis, factor rating, and the center of
gravity method.
(Macrotrends, 2022) (Statista, 2022)
References
Business Location Analysis: Definition, Objectives, Factors. (n.d.). iEduNote. Retrieved March
Business Location: Meaning, Examples & Strategies. (n.d.). StudySmarter. Retrieved March 19,
2023, from
https://www.studysmarter.co.uk/explanations/business-studies/introduction-to-business/b
usiness-location
Demetriou, T. (2022, Oct 27). Starbucks Location Strategy: Analyzing the Geography of a
https://www.eposnow.com/us/resources/starbucks-location-strategy/?fbclid=IwAR1Qu8u
HsIS_w6JiESgEUauu1UcMOJF6U00kD4GP9YiP_Vg-YpivMEsFviE
The Importance of Location Analysis & Location-Based Advertising | Near. (n.d.). Blog.
https://blog.near.com/marketing-advertising/the-importance-of-location-analysis-and-und
erstanding-location-based-advertising/#1-
The Near Team. (2022, May 11). The Importance of Location Analysis & Location-Based
https://blog.near.com/marketing-advertising/the-importance-of-location-analysis-and-und
erstanding-location-based-advertising/#1-
Selecting the right location | Berlin | Europe. (n.d.). Location Decisions | Selecting the right
https://location-decisions.com/challenges/
Singh, A., Baghel, S., & Agrawal, V. (2022, December 23). 9 Factors That'll Help You Choose
The Right Business Location. myHQ Digest. Retrieved March 19, 2023, from
https://digest.myhq.in/factors-choose-right-business-location/