2. Why does location matter?
■ A good location is vital for the success of a business due to many aspects. In order to
choose the best location for a business we need to consider a range of factors
■ Convenience
■ Competition
■ Exposure/image
3. Convenience
■ Convenience for the customer –
– Able to find the business easily and well
– Accessible, such as a shopping center or business park
– Near to residential areas
– Transportation links
• Convenience for the business –
• accessible for suppliers
• Large enough to fully run the business
• Easy for employees to get to
(Business Case study, 2016)
Fig 1- shows the main factors
that business case study
believe are most important
to consider in choosing great
business location. Many of
these apply to the
convenience of the location
4. Competition
■ ‘Location affects competitive advantage through its influence on
productivity and especially on productivity growth.’ (Porter, 2000)
■ Business’ often locate themselves near to other competitors.
Positives of this:
• ‘steal’ the customers of competitors –
e.g. coffee shops
• Easily see their promotion and strategy
and improve own business
• Know there is a high demand for the
product due to the success of the
competitors
Disadvantages of this:
• Customers in one area are limited
• Competitors may still keep their
customers
• Brand loyalty
5. Exposure/image
■ A location with high footfall (such as a shopping center or high street) should result in
more customers entering the business. It also makes customers trust the quality of the
business if based in a large shopping center
■ More customers promote a better company image and encourages word of mouth
advertising again saving money
■ Better exposure results in less advertising costs
6. SimVenture
■ Many different location option within Simventure however, some may be more successful
than others.
■ Working from home
– Advantages: low cost low risk, convenient for employer
– Disadvantages: lack of space, little interaction with others, no exposure and poor image
• Managed office
• Advantages: shared facilities means low cost, access to wide range of resources
• Disadvantages: not a strong image and limited exposure
• Rural premises:
• Advantages: pleasant surroundings, cost effective solution
• Disadvantages: not convenient for customers and suppliers, makes it difficult for sales and
marketing
7. Considering the main factors that we have identified as being important when
choosing a great business location we would recommend choosing one of the
latter three options depending on your business.
■ Small business Center:
– Advantages: cheaper than other commercial premises, support facilities are provided
– Disadvantages: not a prestigious image, limited exposure
• Business park:
• Advantages: good parking facilities, professional image
• Disadvantages: High cost, at least 3 years occupancy
• Retail unit:
• Advantages: highly visible, good for sales, good exposure and image
• Disadvantages: high cost, highly inflexible terms
8. MCQ’s
1,What are the main factors to consider when choosing a location?
A, Convenience, competition, exposure/image
b, Convenience, cost, competition
c, Cost, travel, image
2, which one is not a benefit of a managed office?
a, Low cost
b, Range of resources
c, Highly visible
3, A location with high footfall may result in the need for advertising to…
a, increase, due to demand
b, decrease, due to exposure
c, stay the same
9. Bibliography:
• Business case study (2016) ‘Locating a business to enhance the customer experience. An enterprise
rent-a-car case study’ Pg. 2 [Online]Available from: http://businesscasestudies.co.uk/enterprise-
rent-a-car/locating-a-business-to-enhance-the-customer-experience/factors-affecting-the-
location-of-a-business.html#axzz3zZOOnvDQ [Accessed: Monday 8th February]
• Porter, M. (2000) ‘Location, Competition, and Economic Development: Local clusters in a Global
Economy’ Economic Development Quarterly,Vol. 14 Issue 1, p15,
Articles read:
• Weber, P, & Chapman, D 2011, 'Location Intelligence:An Innovative Approach to Business
Location Decision-making', Transactions In GIS, 15, 3, pp. 309-328, Business Source Complete,
EBSCOhost, viewed 8 February 2016.
• Cohen, N., 2000. ‘Business location decision-making and the cities: bringing companies back.’
Washington, DC: Brookings Institution Center on Urban and Metropolitan Policy.