Question

What are the seven major factors that affect location decisions?

Answer 1

The following are the seven major factors that affect location decision:

1. Competition: Competitive advantage can be explained as strategies that make a company better than its competitors. The company should choose a location where there is no or less competitors, so that it could develop different product and services and sustain in the market for longer.

2. Labor: The labor in the organization plays a major role because they are the base to improve the profit of the organization, when they work united and complete a task then the organization would achieve the set goals. The location should be preferred where there is labor available or it is impossible for the company to sustain longer.

3. Logistics: Logistics can be defined as a process of managing resources right from acquisition to storage, transportation and till the final destination. It typically involves identifying quality distributors and suppliers and determining their efficiency, accessibility and how they handle the entire logistic system. When there is no proper location selected then the logistics and overall business performance.

4. Facilities: The Company should choose a location with high facility availabilities, the raw material, workers; transportation etc needs to be available which helps the company towards increasing their production and service. The customer in the location should be high in number which will ensure towards of the organization.

5. Politics: The political place a major role while choosing location because the government had certain rules and policies where the company needs to adapt towards the same. The company should choose a location which is not at political risk and ensure the company follow the guidelines towards implementing the business in the location. Only that ensures the company to continue the business in that location.

6. Community: Company will produce products keeping their customers at mind; the company should target the right community and market. So that they could be able to satisfy on the needs of their customers and which impacts to increase the profit of the organization.

7. Cost: The site cost plays a major role for the company when choosing the location which impacts the overall business of the organization. The company should choose a site where they could afford and there should be reasonable cost.