Business Location.

Location

PSL Workplace

PSL Workplace is situated on church Road in Parkstone. The present owners of PSL Workplace did not choose the location that it is situated at today.

As discussed previously in this project, the business is a private limited company. The business was in situ and operating (not too well however) when the present shareholders bought their shares in the business. Because the business was not doing very well at the time they bought their shares, the shares were very cheap, this is one of the main reasons why they bought the shares.

The business was not doing very well because there is a lot of competition with other businesses in the area and the business was slightly behind in technology (computers, CAD etc).

Despite all concerns for the business in terms of competitors in the same location, the area does have a lot of advantages. One advantage of the location is that with lots of competitors, also comes a chance for a lot of inter-business co-operation, also the area where the business is situated has a good “infrastructure”, this means that it has easy access. The business has such a good infrastructure because it is situated next to a main road and also has its very own car park. This car park comes in very useful because not only does it mean that workers can park near by, but also van and lorries can park there as well which is exceedingly useful as there are often deliveries that need to come in vans.

Below is a map of where PSL workplace is situated:

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Richer Sounds

Richer sounds has 42 stores. The first stores location was chosen because Julian Richer lived in the area and heard about a small shop which was coming out onto the market. The next store opened in the north because customers where driving down from Manchester to buy from a London store. It was therefore sensible to open the new shop in the north west. Stockport was chosen as the most accessible location.

When choosing the location of a shop, Richer sounds consider two ...

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Below is a map of where PSL workplace is situated:

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Richer Sounds

When choosing the location of a shop, Richer sounds consider two main principles:

There must be sufficient potential customers for the store to be profitable.
The store must not be too near another Richer sounds store, otherwise they will “share out” the same customers – rather than attract new ones!

Most importantly, Richer sounds stores are not expanding too rapidly. Julian Richer is wary of expanding too quickly. This is because rapid expansion has been disastrous for many companies. Julian Richer learnt this the hard way when he grew from 4 stores to 16 in 18 months. Then, because of financial situations he had to cut back down to 11 stores. Today Julian Richer is far more cautious. He now prefers to follow a year of expansion with a year of consolidation – when he focuses on improving what he has, rather than simply getting more!

When considering the location of their warehouse, Richer sounds had considered two other factors:

The cost – a distribution centre is large and takes up a lot of space, making it very expensive to rent or buy. Therefore the cost of the site is critical.
Infrastructure – Accessibility to motorway networks is critical because they have to deliver all around the country.

Below is a map of the location of Richer Sounds’ warehouse:

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Comparison

In theory, the factors affecting business location are availability of workers, nearness to markets, local environment and infrastructure. When we say “availability of workers” we mean, the amount of people in the area who would suit the specific jobs that the business offers. When we say “nearness to markets” we are talking about how close the business is to target markets and therefore potential customers. When we talk about the “local environment” we are talking about if the location is pleasant and whether it has good facilities, if the local environment is good then it will be easier to attract and to retain employees. When we talk about “infrastructure”, we are talking about the man-made environment such as roads, railways, housing etc. Improved transport has given businesses a much greater choice of loacation. Over 80% of goods are delivered by roads. Motorways make it easy to deliver raw materials, door to door, even to remote locations.

In reality, not all of these factors are of the same importance. The table below tries to indicate the relative importance of a range of factors to Richer sounds and PSL Workplace. The factors are numbered in order of importance.

It is interesting to note that both of the businesses have infrastructure as one of the most important factors. This shows that infrastructure is an important aspect of a location. It is also interesting to note that while “nearness to markets” is Richer sounds’ most important factor, it is PSL Workplace’ least important factor. This is because Richer sounds is selling products to the general public and so needsa to be easily accessable by the public. PSL Workplace on the other hand, is not aimed at the general public at all, it is aimed at businesses, therefore being near a market is not needed.

Conclusion

The location of a business varies depending on what the business provides/sells/does. This means that listing important factors to a location is very well, but, the important factors for one business don’t always apply to another business. This means that when considering a location for one business, just because another business in that location is thriving, your business is no necessarily going to thrive as well, it depends on who and what your business does, and, most importantly, who the business is aimed at. The perfect location is a location where you are able to give or take all the resources you need and where you are right in the middle of your target customers.