How does location strategy affect the performance of any organization?

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brettd | High School Teacher | (Level 2) Educator Emeritus

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Location, location, location is the typical business mantra when it comes to being profitable and successful, particularly if it is a retail business.  Most companies will conduct a market evaluation of any prospective area to open a new business to see if there is either enough demand, reasonable overhead costs and supplier access to give a business the best possible chance for success.

For example, if you wanted to open a new espresso stand, you would want to locate it in such a way that there is a high rate of foot and vehicle traffic at that location, and that there are few competitors in that area to dilute your potential customer base.  If you decide to locate in a small town, that could affect delivery costs and the traffic I mentioned above, and you might need a different business model.

If your business is not retail, but rather manufacturing, you would be considering the cost of real estate, electricity in that location as well as tax incentives to locate there.

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