Business Locations and Factors Affecting Choice of Location: Flashcards
Shopping Centre
an undercover complex of shops
Advantages to Shopping Centre
- Offer convenience such as access to one or more shops under the same roof.
- Provide parking and easy access to public transport
- High foot traffic being undercover, therefore easy to attract customers.
Disadvange to Shopping Centre
- Leasing a space can be expensive
- Need to remain open during centre hours
- High dependence on centre to renew lease
Retail shopping strips
A row of shops with a footpath in front along a busy road
Advantage to Retail Shopping Strips
- Offer high visibility for passing traffic (those travelling by public and private transportation).
- Provide access to customers who live and work locally.
- Less expensive to lease and operate when compared to shopping centres.
- there is no restriction on opening hours
Disadvantage to Retail shopping strips
- Foot traffic is lower than in shopping centres since footpaths are not protected from poor weather
- Lack of parking can be an issue, which can deter customers
- There is heavy competition from shopping malls
Online presence
A business that operates through the internet
Advantages to Online Presence
- Offers greater access to new customers, both locally and globally.
- Can save on rent, utilities, etc., if the business has no physical storefront.
Disadvantages to Online Presence
- Can be expensive to plan, design, and maintain an online presence
- Greater responsibility on businesses to protect personal information of customers
Home Businesses
Operate from the business owner’s home office.
Advantage to Home Business
- The business owner has the flexibility to choose their working hours.
- Reduced daily commute - can save time and money on travel.
- No need to rent or purchase a business space, therefore business expenses are lower.
Disadvantage to Home Business
- Work-life balance can be harder to achieve due to difficulty separating work and personal life.
- The business owner may feel isolated from other individuals and miss social interaction.
- The business owner must also be a jack of all trades – should be able to manage all aspects of the business by themselves, including marketing, finance, inventory, etc.
Visibility
Retail & service-based businesses need high
- visibility: shopping centre or main street.
- Manufacturing businesses don’t need a highly visible location
Cost
- Location in shopping centre is more expensive than location with less passing customer traffic.
Proximity to customers & suppliers:
- Locate close to customers & suppliers for customer convenience and minimise costs of transportation from suppliers.
- Retail businesses need close proximity customers
- Manufacturing businesses don’t need close proximity to customers.
Proximity to competitors:
Unwise to establish business in shopping centre with many stores of the same type, unless businesses are not satisfying demands.
Complementary businesses:
Offer goods and services aimed at the same customers. Can assist in bringing customers to a new business.
