Source of competitive advantage
location decision process resembles an inverted pyramid (selecting region of country/ state/ city/ site)
Region: looking out of an airplane at 30,000 foot level/ placing customers first when deciding. Common requirements include rapid population increases of certain age group/ rising disposable income/ necessary infrastructure/ available workforce/ low operating costs (US census bureau 4 demographics)
State: economic development office recruits new businesses/ biased towards in state locations/ assess business. Key issues- laws/ regulations/ taxes that govern business, cost of operation, workforce availability, state incentives. Factors- proximity to market/ raw materials/ wage rates/ quantity & quality of labor supply/ tax rates/ general business climate/ internet access/ total operating costs
City: Population trends/ competition/ community compatibility/ local laws & regulations/ appropriate infrastructure & utilities/ incentives/ quality of life
clusters (geography concentrations of interconnected companies/ specialized suppliers/ service providers that are present in a region)
zoning laws (laws that divide a city/ county into small districts to control use of land/ buildings/ sites
Variance (special exemption to a zoning ordinance)
Site: manufacturers prime consideration- access to raw materials/ suppliers/ labor/ transportation/ customer- located where they want to do business (pop-up stores test market sustainability)
Location criteria for retain and service businesses
Trading area: the region from which a business can expect to draw customers over a reasonable time span
type and size of business influence the trading area/ larger area when they have competitive edge
Retail Compatibility: the benefits a company receives by locating near other business that sell complimentary products and services/ generate high volumes of traffic
Degree of competition: size/ location/ activity of competing businesses influence trading area
Index of retail saturation: measure of the potential sales per square foot of store space for a product within a specific trading area. Ratio of trading areas sales potential for a product or service to its sales capacity
Reilly's law of retail gravitation: uses gravity to estimate attractiveness of a particular business to potential customers. Business ability to draw customers related to distance customers must travel to reach it. Also provides a way to estimate trade boundary between two market areas by calculating the break point between them. At that point, customers becomes indifferent about shopping either store
Transportation network/ Physical & Psychological barriers/ customer traffic/ adequate parking/ representatives/ visibility
Location options for retail and service business
central business district/ neighborhood locations/ shopping centers (strip mall/ neighborhood/ community)
near competitors/ shared spaces/ inside large retail stores/ nontraditional locations/ home based/ on road
Location decision for manufacturers
Foreign trade zone: designated area near US customs port/ allows resident companies to import materials from foreign comps/ assemble/ process/ manufactured/ packaged/ ship finished product while reducing tariffs/ duties
Business Incubator: organization that combines low cost/ flexible rental space with support services for small business residents
Layout and design considerations
layout: logical arrangement of physical facilities in a business that contributes to efficient operations/ increased productivity and higher sales- design should represent the business character/ culture
when creating a layout, managers must consider its impact on the space itself (comfortability/ flexibility/ size/ ergonomics) the people who occupy it (type of work/ special regulations/ need for interaction/ task performed) technology they use (communication/ internet access/ equipment)- following have impact on space layout/ design
size and adaptability/ construction and appearance (keep displays simple/ clean/ current) inviting entrances and appealing signs/ Americans with disabilities (requires all business to make accessible)
Building interiors/ drive thru windows/ sight, sound, scent & lighting/ sustainable/ environmental friendly
Ergo Economics: science of adapting work/ environment to compliment employee strength/ suit needs
Layout: Maximize revenues/ increasing efficiency/ reducing costs
Retailer layout: arrangement of merch/ displays in a store/ understanding targets/ appeal to customers/ make it easy to locate merch/ compare price/ quality/ features to make purchase
Manufacturer layout: arrangement of departments/ workstations/ machines/ stock holding points within facility. Factors that influence layout- type of product/ production process/ ergonomics/ economics/ space availability
Prod line layout- arrangement of workers/ equipment according to sequence of operation performed on product
Process layout- arrangement of workers/ equipment according to general function they perform without regard to any product or customer
Fixed position layout- arrangement for materials assembled on the spot instead of down product line
Designing production layouts: Workers productivity/ material handling costs- provides tools/ system
7 waste-Transportation/ inventory/ motion/ waiting/ overproduction/ processing/ defect
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