powerpoint presentation · 2012-03-25 · mortar business location. ... key factors in the location...

Chapter 11 Copyright © 2010 by Nelson Education Ltd.

Selecting the

Location and

Planning the

Facilities

11

PowerPoint Presentation by

Ian Anderson, Algonquin College

Chapter 11 Copyright © 2010 by Nelson Education Ltd. 11-2

Looking Ahead

After studying this chapter, you should be able to:

1. Describe the factors affecting the choice of a bricks-and-

mortar business location.

2. Discuss the challenges of designing and equipping a

physical facility.

3. Describe the attraction and challenges of a home-based

business.

4. Understand the potential benefits of locating a start-up on

the Internet.


Key Factors in the Location Decision

• Customer accessibility

–As a matter of access by target customers

–As a matter of customer convenience

–As a necessity to avoid shipping costs

• Environmental business conditions

–Climate-related factors

–Business environment factors

• Competitors, legal requirements, and tax structure

continued…



• Resource Availability –Nearness to raw materials

–Availability of a suitable labour supply

–Access to adequate and reliable transportation

• Personal Preference of the Entrepreneur –Familiarity with home community

–Familiarity of community with

entrepreneur

…continued



• Site Availability and Costs –Difficulty of locating a good site

• Business incubator provides shared space, services, and management assistance for new businesses

–Large costs for and commitment required to purchase site

outright.

–Leasing avoids a large cash outlay and allows the owners to

postpone committing to the site before the

business becomes a success.


Five Key Factors in Determining

a Good Business Location

Exhibit 11-1

11-6


Designing the Physical Facilities

• Functional Requirements –Physical facilities should be of adequate size and

accommodation

–Ideal building is one that matches the functional requirements of the business

• Considerations include: • Age and condition of building

• Fire hazards

• Heating and air conditioning

• Lighting and restroom facilities

• Entrances and exits


Typical Process Layout

Exhibit 11-4


Factory Layout

• Factory Layout

–Process layout

• A factory design that groups similar machines together

– A machine shop with drill presses separate from lathes

–Product layout

• A factory design that arranges machines according to their roles

in the production process

– Product is moved progressively from one work station to the next


Grocery Store Layout

Exhibit 11-5


Retail Store Layout

• Retail Store Layout

–Grid pattern • A block-like layout that provides for good merchandise exposure

and simplifies security and cleaning

–Free-flow pattern • A flexible layout that is visually appealing and gives the

customers the freedom of movement

–Self-service layout • A design that gives customers direct access to merchandise


Retail Store Layout

Exhibit 11-6


Challenging in Equipping

the Physical Facilities

• Manufacturing Equipment

–General-purpose equipment • Machines that serve many

functions in the production system

–Special-purpose equipment • Machines designed to serve

specialized functions in the production process

…continued


Equipping the Physical Facilities

Special-Purpose

Equipment

• Low labour cost

• High hourly output

General-Purpose

Equipment

• Low purchase cost

• Flexible production

• Good resale value


Office Equipment

• Challenging to keep pace with technology

–Computers

• Networks, e-mail

–Fax machines

–Copiers and printers

–Telephone systems

• Voice mail

• Interactive voice response (IVR)


Home-Based Businesses

• Advantages

–Low start-up and overhead costs

–Convenience for family and lifestyle

•Technology

–Advances in office equipment

allow home-based business

to compete with commercial

sites


Challenges of Home-Based Businesses

• Challenges

–Family and business conflicts • The need to observe regular business hours and establish spatial

boundaries (specific work areas) to avoid distractions.

–Business image of a home-based business • Professional image is difficult to maintain in a home environment.

–Legal considerations • Local laws and zoning ordinances prohibit many types of home-

based businesses.


Locating on the Web:

E-Terms

• E-commerce

– The paperless exchange of business information via the

Internet

• eCRM (Electronic Customer Relationship Marketing)

– An electronically based system that emphasizes customer

relationships

– Utilizes a customer-centric database

• E-tailing

– Round the clock electronic access to products/services

11-18


Benefits of E-Commerce

• Compete with bigger businesses on a level

playing field

• Access to worldwide customers

• Compresses the sales cycle

– great for cash flow

• Enhancing customer service and CRM

through technology

11-19


Drawbacks of E-Commerce

• Technical limitations

– Cost of developing / maintaining website

– Bandwidth and access issues

– Changing software and hardware

• Nontechnical limitations

– Privacy and security

– Intangibility

– Global language/culture barriers

11-20


E-Commerce Business Models

11-21

Exhibit 11-7


B2B and B2C Business Models

11-22

• B2B – (business-to-business)

– based on selling to business customers

electronically

• B2C (business-to-consumer)

– based on having final consumers as customers

– 24/7 e-tailing provides round the clock access

to products and services


Auction Sites

11-23

• Web-based businesses offering participants

the ability to list the products for bidding

• Examples include e-Bay, bidz.com, and

Yahoo auctions


Selling an Item on e-Bay

11-24

Exhibit 11-8

powerpoint presentation · 2012-03-25 · mortar business location. ... key factors in the location...

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