Location Planning

Location Planning and analysis

1. Location decisions can have an impact on access to markets, costs (including materials, labor, rent, construction, and transportation), quality of work life (e.g., community-related factors), and growth potential.

2. The fact that similar businesses are widely located underscores the futility of searching for that “one best” location. On the other hand, however, it doesn’t necessarily follow that little attention is needed in finding a suitable location. Many organizations that have not been successful are no longer in business (e.g., service stations in poor locations, motels bypassed by an expressway, and so on). Moreover, others currently in operation might be much more profitable in another location. For certain businesses (e.g., restaurants) regional factors are not particularly significant, and even community-related factors are of little importance. However, site-related factors are extremely important. By the same token, there are numerous examples of firms that are less affected by community or site factors than they are with regional factors (i.e., nearness to market, labor, or raw materials).

3. Important community factors include the size of the community, public transportation, schools, recreational facilities, libraries, restaurants, shopping centers, cultural and entertainment selections, and so on.

4. Manufacturing and non-manufacturing organizations tend to approach location decisions in a similar way, but the factors which are important to each tend to differ. While both tend to take costs and profits into consideration, manufacturing firms are often concerned with location of raw materials, transportation costs, availability of energy and water, and similar factors. Non-manufacturing firms are often more concerned with convenience, access to markets, traffic flow, and the like.

5. Foreign locations may offer lower taxes, access to markets, availability of raw materials, lower transportation costs (nearness...