McDonald's restaurant owner chose to locate its business in Stratford, because it is near customers. Stratford is a very busy place; people come to the shopping centre, in which McDonald's restaurant is located, to shop around

Agne Griauslyte

Task 3: Business location

Choice of ownership : Franchise

Name of business: McDonald’s

Area: Stratford

To all businesses one of the most important things is where the business is located. The correct location is crucial in order for business to be successful. Bad location can cause a lot of problems and cut down the profit. Good business location attracts more customers and increases profit. The following are factors considered by McDonald’s when choosing their location.

McDonald’s restaurant owner chose to locate its business in Stratford, because it is near customers. Stratford is a very busy place; people come to the shopping centre, in which McDonald’s restaurant is located, to shop around. If customers get hungry they can always come to McDonalds, because they don’t need to go far away from the shopping centre, McDonald’s restaurant is right there. In Stratford people come to the library, which is only few meters away from McDonald’s. Library has free space where student can do their homework and get support. After doing their homework student come to McDonald’s to eat something. In Stratford you can find a very big park with tennis-court, football field, basketball playing area and other leisure activities. People after playing games or relaxing in the park come to McDonald’s eat something. In Stratford are located many banks, travel agencies, post office, job centre and other institutions. McDonald’s is a perfect place for workers from those institutions, they come to have their lunch at McDonald’s, because in the restaurant food is prepared very quickly, after their lunch workers still have some free time. Also in Stratford are many residential houses, sometimes family wants to relax and don’t do no cooking, so they can come to McDonald’s and have their dinner.

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It is good to locate business near good transport links, so customers can come from very different areas. Stratford has very good transport links. Stratford tube station has access to central line, line jubilee line and DLR. So customers can come from different parts of London. Also it has access to trains, so customers can event come from outside of London. Stratford has very big bus stop. Buses go to very different areas, so again customers can come from very different places. Stratford has few buses which go Stanstead airport, people who are traveling to Stanstead might want to go to McDonald’s to eat something before a long journey. Customers who come with cars, do not have any problems with can parking, Stratford shopping centre has 4 floor car parking. McDonald’s restaurant is located in very board road, so it makes easier to suppliers to deliver products.

In some cases it might be better for a business to locate near its competitors because customers ‘shop around’. A business locating away from the others might be at a disadvantage because customers visit where there are many shops or restaurant to look at and choose from. McDonald’s in Stratford has many competitors. Pizza hut, KFC, Burger king, Kebabs corner, PFC all these are competitors to McDonald’s, because they also are restaurants, and most of them are fast food restaurant. So it is sometimes good to locate business near its competitors, customers come to the places where they can choose one shop from many, one restaurant from few restaurant and so on.

When choosing a location you have to see if you will find the right staff in the area. If a business is located near a college which offers courses in catering, employer will probably find staff that can cook and work in a catering business. McDonald’s restaurants usually don’t need qualified people to work in the restaurant, because wage is not very big and training is given before employees start working. In Stratford is very easy to find not qualified job-seeker, because in Stratford live a lot of people who are immigrated in England, they are seeking for job and most of them are not qualified.

Sometimes business owner decide to locate business in particular area of their personal reasons. For example if business owner is born in Stratford, and he has lived his entire live here, he loves this place and he doesn’t want to move anywhere else, so he might decide to open up his business in Stratford. But this is what more sole trader business does; franchisors usually decide to open up a business where they know that they can make a big profit.

Business generally need to pay rent to hire their shop/premises and also have to pay high rates to the councils if located in a sought after area. In Stratford rent is very high, because it is a popular place, it’s near the tube station, and it is in a shopping centre. A lot of people come to Stratford every day. McDonald’s chose to locate the business in Stratford with very high rent because they thinks that they can make a lot of profit and cover the rent. The closer the business is to the inner cities the higher rent and rates you are likely to pay.

Feedback – a very good pass. You demonstrate a good understanding of the factors affecting location.