Are you trying to develop an effective location strategy and want to understand how it works? Our article will describe how this tool will help achieve a profitable business activity. Also, we have prepared examples that will clearly show you how this strategy works and how to develop your own.
🔝 Top-6 Location Strategy Examples
- Starbucks Company Analysis: More Than a Cup of Coffee
- Location-Based Marketing: Issues and Trends
- Just Us! Coffee Roaster Company's Marketing Plan
- Ocean Beauty Center: Business Proposal
- Whitewater West Industries Limited Case Study
- Process and Location Strategy McDonald's
📍 What Is a Location Strategy?
Enterprises use this process to determine where to locate their offices and staff. Although business and economic-related incentives have a considerable role to play, a location strategy factors way more than that. It evaluates the labor data and market information to try and pre-determine the organization’s availability, cost, and sustainability of the labor force.
What Is the Importance of Location Strategy?
A good company location is important in defining the success that an enterprise can achieve. It can boost the company’s long-term performance at the global level, helping to increase sales and profitability. On the contrary, failing to get a company the right location can be detrimental, resulting in loss of talent, productivity, and capital. Let’s look at the main aspects defining a company’s location strategy.
🤔 What Are the Factors that Influence Location Strategy?
To effectively implement a business location strategy, we need to form scenarios that factor in different directions of the future orientation of the organization. Therefore, we should fore-look at various marketing scenarios and determine which markets the enterprise will enter and what products to be launched. Geopolitical challenges and tech developments are also crucial in predicting company stability. Other critical aspects include the tax climate, risk profile of current locations, and expected mergers or acquisitions.
In addition, we need to get close to the site and look at the facilities available for the enterprise. Each facility can help to determine the nature of space the company will need both in the short and long term. Another factor is the feasibility of the new location, which involves analyzing various operating costs. Extend the review to the local community, trade zones, political risks, environmental regulation, and available incentives.
🌟 Examples of Location Strategy
Once you have identified the main aspects of business location strategy, the next step is drawing one. So, it’s time to explore some examples of location strategy. Let’s highlight the best:
Starbucks’ Location Strategy
Starbucks’s location strategy focuses on urban areas, especially those with considerable upper and middle-class populations. That’s why the enterprise locates its retail cafes in the most densely populated locations in the world. In some cases, Starbucks employs strategic clustering to win a more significant market share and outdo competitors. A closer review of the company’s operations management further reveals that it prefers areas with clients who can afford its premium products.
At a broader level, the coffee shops’ locations further review that it puts a lot of weight on the customers. Visually, there is a bias towards large metropolitan areas and coastal cities across the globe. Its approach stands out because these urban regions have high-income earners compared to rural areas. For example, California features most Starbucks cafes. The location strategy has also worked effectively because every target area, such as California, has reported significant population growth of people who can afford its premium products.
Apple’s Location Strategy
Apple’s strategy for determining the location is selective, which involves identifying a limited number of authorized dealers. Notably, most of the authorized stores for Apple are located in towns where they can optimize foot traffic and exposure for the brand. So far, the respected company has hundreds of stores in different nations across the globe. Despite this limitation to the authorized dealers, the company remains one of the most profitable brands.
Apple also reports the highest revenue per square foot in the US. In addition to using the selective location approach, the firm has stores in Silicon Valley and San Francisco. This region is home to some of the best tech companies that expose it to high competition, helping it to maintain a competitive edge in the tech market. The location also means it can get simpler supplies because of proximity to sources. Therefore, this is an excellent example of a location strategy application.
To sum up, a well-designed location strategy is critical to the success of any business. By carefully examining factors such as proximity to suppliers, workforce availability, transportation, and customer demographics, companies can determine the best locations for their activities. Thus, consider our other examples demonstrating the importance of location strategy in achieving business goals.