Location
Location is Production activity should be located where a firm can be most productive, and yield the highest revenues per unit of investment. A highly productive plant.
So in order to find a suitable place for a certain firm to locate their factories, shops, buildings and equipment, they will have to go through some factors that might help them with it. It would also help them in terms of handling a successful company.
But the main points in having a great location, is that it should be near to the market, in order for the demands of the output would vary the costs making of the input. (businesscasestudies.co.uk)
The factors are:
- Cost
- The cost of the location has to be cheaper, and the owner has to be able to pay for it.
- It would be better if they just rent it instead of buying it.
- The use of transporting the goods.
- Tradition
- The items that are being produced should be suitable for the people that lives in that certain area.
- Suitable for the culture, and especially religion.
- Example:
- Selling pork in a Muslim country would not be appropriate.
- Customers
- We can look this in terms of the groups of ages.
- Will there be a lot of teenagers in that area? What would they like? Perfumes? Magazines?
- The type of people living there:
- Rich People?
- Poor People?
- Average People?
- Competition
- Are there any shops that sells the same thing as what we are selling?
- This kind of situations might create competition between the two shops.
- The disadvantage of it is that wherever we go, there will always be a competition.
- Environment
- Is it close to the supplier for our resources?
- Do we have enough land?
- This applies to big companies around the world.
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