Case Of Location Choice For Existing Organisation Business Essay

upshot Of Location picking For Existing organic law Business Essayfor an organisation. One of the key features of a conversion operation manufacturing system is the force with which the products run be transferred to the guests.This fact lead include the determination of where to place the plant or knack.The selection of jam is a key-decision as large enthr hotshotment is made in building plant and machinery. It is not prudent or not possible to change the arrangement very often. So an improper reparation of plant whitethorn lead to waste of completely the investments made in building and machinery, equipment. Before a location for a plant is selected, long simulacrum forecasts should be made anticipating future needs of the company. The plant location should be based on the companys expansion plan and policy, diversification plan for the products, changing mart place conditions, the changing sources of raw materials and many other factors that captivate the choice of the location decision. The purpose of the location study is to find an optimum location one that will result in the greatest advantage to the organization.The need for selecting a suitable location arises because of three situations.When starting a new organisation, i.e., location choice for the branch season.In case of existing organisation.In case of Global Location.In Case of Location Choice for the First fourth dimension or New Organisations personify economies atomic number 18 always all alpha(predicate) while selecting a location for the first duration, bargonly should keep in mind the comprise of long-term barter/organisational objectives. The side by side(p) be the factors to be considered while selecting the location for the new organisationsIdentification of region The organisational objectives on with the various long-term considerations about securities industrying, technology, internal organisational strengths and weaknesses, region specific resources and business environment, legal-g everyplacenmental environment, social environment and geographical environment suggest a suitable region for locating the trading trading operations facility.Choice of a situation within a region Once the suitable region is identified, the next step is choosing the best site from an available install. Choice of a site is less dependent on the organisations long-term strategies. Evaluation of alternative sites for their tangible and impalpable be will resolve facilities-location problem. The problem of location of a site within the region gouge be approached with the following follow-oriented non-interactive model, i.e., dimensional analysis.Dimensional analysis If all the costs were tangible and quantifiable, the comparison and selection of a site is easy. The location with the least cost is selected. In most of the cases intangible costs which argon expressed in relative cost than in absolute terms. Their relative merits and demerits of s ites displace besides be comp ared easily. Since both tangible and intangible costs need to be considered for a selection of a site, dimensional analysis is used.In Case of Location Choice for Existing OrganisationIn this case a manufacturing plant has to fit into a multi-plant operations strategy. That is,additional plant location in the same expound and elsewhere under following circumstancesPlant manufacturing distinct products.Manufacturing plant supplying to specific market area.Plant shared out on the basis of the process or stages in manufacturing.Plants accentuate flexibility.The distinguishable operations strategies under the above circumstances could bePlants manufacturing distinct products Each plant services the immaculate market area for the organization. This strategy is necessary where the needs of technological and resource inputsare specialized or distinctively different for the different product-lines.For example, a high step precision product-line should n ot be set along with other product-line requiring little emphasis on precision. It whitethorn not be proper to permit in any case many contradictions such as sophisticated and old equipment, highly skilled and semi-skilled personnel,delicates processes and those that could permit rough handlings, all under one roof and one set of managers. Such a setting leads to much confusion regarding the ask emphasis and the counsel policies. Product specialization may be necessary in a highly competitive market. It may be necessary to exploit the special resources of a particular geographical area. The more decentralized these pairs are in terms of the management and in terms of their physical location, the smash would be the planning and control and the utilization of the resources.Manufacturing plants supplying to a specific market area Here, all(prenominal) plant manufactures almost all of the companys products. This type of strategy is useful where market proximity consideration domi nates the resources and technology considerations. This strategy requires great deal of coordination from the corporate office. An entire example of this strategy is that of soft drinks bottling plants.Plants divided on the basis of the process or stages in manufacturing Each output signal process or stage of manufacturing may require distinctively different equipment capabilities, labour skills, technologies, and managerial policies and emphasis. Since the products of one plant feed into the other plant, this strategy requires much centralized coordination of the manufacturing activities from the corporate office that are expected to understand the various technological aspects of all the plants.Plants emphasizing flexibility This requires much coordination between plants to meet the changing needs and at the same time ensure efficient use of the facilities and resources. Frequent changes in the long-term strategy in order to improve be efficiently temporarily, are not rosy for the organization. In any facility location problem the central question is Is this a location at which the company usher out remain competitive for a long time?For an established organization in order to add on to the capacity, following are the waysExpansion of the facilities at the existing site This is acceptable when it does not violate the basic business and managerial outlines, i.e., philosophies, purposes, strategies and capabilities. For example, expansion should not compromise quality, delivery, or customer service.Relocation of the facilities (closing down the existing ones) This is a drastic step which can be called as Uprooting and Transplanting. Unless there are very compelling reasons, relocation is not done. The reasons will be either rescue radical changes in technology, resource availability or other destabilization.All these factors are applicable to service organizations, whose objectives, priorities andstrategies may differ from those of hardcore manufacturing organizations.In Case of Global LocationBecause of world(a)isation, multinational corporations are setting up their organizations in India and Indian companies are extending their operations in other countries. In case of global locations there is scope for virtual proximity and virtual factory.Reasons for global location are as followsTangible Reasons The tangible reasons for setting up an operations facility abroad could be as followsReaching the customer One obvious reason for locating a facility abroad is that of capturing a share of the market expanding worldwide. The phenomenal growth of the GDP of India is a big reason for the multinationals to have their operations facilities in our country. An consequential reason is that of providing service to the customer promptly and scotchally which is logistics-dependent. Therefore, cost and case of logistics is a reason for setting up manufacturing facilities abroad. By logistics set of activities closes the gap between production of goods/services and reaching of these intended goods/services to the customer to his satisfaction. Reaching the customer is thus the main objective. The tangible and intangible procures and costs depend upon the company defining for itself as to what that reaching means. The tangible costs could be the logistics related costs the intangible costs may be the risk of operating is a foreign country. The tangible gains are the immediate gains the intangible gains are an outcome of what the company defines the concepts of reaching and customer for itself.Intangible Reasons The intangible reasons for considering setting up an operations facility abroad could be as followsCustomer-related ReasonsWith an operations facility in the foreign country, the firms customers may feel secure that the firm is more kind. Accessibility is an important service quality determinant.The firm may be able to give a personal tough.(c) The firm may interact more intimately with its customers and may thus understand their requirements better.(d) It may also keep other potential customers in the foreign location.Organisational Learning-related Reasons(a) The firm can learn advanced technology. For example, it is possible that cutting-edge technologies can be learn by having operations in an technologically more advanced country. The firm can learn from advanced research laboratories/universities in that country. Such learning may help the entire product-line of the company.(b) The firm can learn from its customers abroad. A physical location there may be essential towards this goal.(c) It can also learn from its competitors operating in that country. For this reason, it may have to be physically present where the action is.(d) The firm may also learn from its suppliers abroad. If the firm has a manufacturing plant there, it will have intensive interaction with the suppliers in that country from whom there may be much to learn in terms of modern and appropriate technology, modern mana gement methods, and new trends in business worldwide.Other Strategic Reasons(a) The firm by being physically present in the host country may gain some topical anaesthetic boy kind of psychological advantage. The firm is no more a foreign company just sending its products across foreign borders. This may help the firm in lobbying with the government of that country and with the business associations in that country.The firm may avoid political risk by having operations in multiple countries.(c) By being in the foreign country, the firm can build alternative sources of supply. The firm could, thus, reduce its supply risks.d) The firm could hunt for human great in different countries by having operations in those countries. Thus, the firm can gather the best of people from across the globe.(e) Foreign locations in addition to the domestic locations would lower the market risks for the firm. If one market goes slow the other may be doing well, thus lowering the overall risk.F ACTOR S INFLUENCING installing LOCATIONFacility location is the process of determining a geographic site for a firms operations.Managersof both service and manufacturing organizations must weigh many factors when assessing the pizzazz of a particular site, including proximity to customers and suppliers, labour costs, and point costs. Location conditions are complex and each comprises a different characteristics of a tangible (i.e. Freight rates, production costs) and non-tangible (i.e. reliability, Frequency security, quality) nature.Location conditions are hard to measure. Tangible cost based factors such as wages and products costs can be quantified precisely into what makes locations better to compare. On the other hand non-tangible features, which refer to such characteristics as reliability, availability and security, can only be measured along an ordinal or notwithstanding nominal scale. Other non-tangible features like the percentage of employees that are unionized can be measure d as well. To sum this up non-tangible features are very important for business location decisions. It is appropriate to divide the factors, which influence the plant location or facility location on the basis of the nature of the organisation asGeneral locational factors, which include controllable and uncontrollable factors for all type of organisations.Specific locational factors, specifically necessary for manufacturing and service organisations.Location factors can be further divided into two categories.Dominant factors are those educed from competitive priorities (cost, quality, time, and flexibility) and have a particularly strong tres ease up on sales or costs. Secondary factors also are important, but management may downplay or even ignore some of them if other factors are more important.General Locational FactorsFollowing are the general factors required for location of plant in case of all types of organisations.CONTROLLABLE FACTORS proximity to markets Every company i s expected to serve its customers by providing goods and services at the time needed and at reasonable price organizations may choose to locate facilities close to the market or away from the market depending upon the product. When the buyers for the product are concentrated, it is advisable to locate the facilities close to the market. Locating nearer to the market is preferred ifThe products are delicate and susceptible to spoilage.After sales services are promptly required very often. Transportation cost is high and increase the cost significantly.Shelf life of the product is low.Nearness to the market ensures a consistent supply of goods to customers and reduces the cost of merchant marine.Supply of raw material It is essential for the organization to get raw material in right qualities and time in order to have an unceasing production. This factor live ons very important if the materials are perishable and cost of transportation is very high. General guidelines suggested by Yaseen regarding effects of raw materials on plant location areWhen a single raw material is used without loss of weight, locate the plant at the raw material source, at the market or at any point in between.When weight loosing raw material is demanded, locate the plant at the raw material source.When raw material is universally available, locate close to the market area.If the raw materials are processed from variety of locations, the plant may be situated so as to minimize full transportation costs.Nearness to raw material is important in case of industries such as sugar, cement, jute and cotton textiles.Transportation facilities Speedy transport facilities ensure well-timed supply of raw materials to the company and finished goods to the customers. The transport facility is a prerequisite for Facility Location and Layout the location of the plant. There are five basic modes of physical transportation, air, road, rail,water and pipeline. Goods that are mainly intended for export s demand a location near to the port or large airport. The choice of transport method and accordingly the location will depend on relative costs, convenience, and suitability. Thus transportation cost to value added is one of the criteria for plant location.Infrastructure availability The basic stand facilities like power, water and waste disposal, etc., become the prominent factors in deciding the location. Certain types of industries are power hungry e.g., aluminum and steel and they should be located close to the power station or location where uninterrupted power supply is assured throughout the year. The non-availability of power may become a survival problem for such industries. Process industries like paper, chemical, cement, etc., require continuous. Supply of water in large amount and good quality, and mineral content of water becomes an important factor. A waste disposal facility for process industries is an important factor, which influences the plant location.Labour an d wages The problem of securing adequate number of labour and with skills specific is a factor to be considered both at territorial as well as at community level during plant location. Importing labour is usually costly and involve administrative problem. The history of labour relations in a prospective community is to be studied. Prospective community is to be studied. productivity of labour is also an important factor to be considered. Prevailing wage pattern, cost of living and industrial relation and bargaining power of the unions forms in important considerations.External economies of scale External economies of scale can be described as urbanization and locational economies of scale. It refers to advantages of a company by setting up operations in a large city while the second one refers to the settling down among other companies of related Industries. In the case of urbanization economies, firms derive from locating in larger cities rather than in smaller ones in a search o f having access to a large pool of labour, transport facilities, and as well to increase their markets for selling their products and have access to a much wider range of business services. Location economies of scale in the manufacturing sector have evolved over time and have mainly increased competition due to production facilities and lower production costs as a result of lower transportation and logistical costs. This led to manufacturing districts where many companies of related industries are located more or less in the same area. As large corporations have recognize that inventories and warehouses have become a major cost factor, they have tried reducing inventory costs by launching Just in Time production system (the so called Kanban System). This high efficient production system was one main factor in the Japanese car industry for being so successful. Just in time ensures to get spare parts from suppliers within just a a few(prenominal) hours after ordering. To fulfill th ese criteria corporations have to be located in the same area increasing their market and service for large corporations.Capital By looking at capital as a location condition, it is important to distinguish the physiology of fixed capital in buildings and equipment from financial capital. Fixed capital costs as building and construction costs start out from region to region. But on the other hand buildings can also be rented and existing plants can be expanded. Financial capital is highly unstable and does not very much influence decisions. For example, large Multinational Corporations such as Coca7Cola operate in many different countries and can raise capital where interest rates are lowest and conditions are most suitable. Capital becomes a main factor when it comes to venture capital. In that case young, fast increase (or not) high tech firms are concerned which usually have not many fixed assets. These firms particularly need access to financial capital and also skilled educa ted employees.UNCONTROLLABLE FACTORSGovernment policy The policies of the state governments and local bodies concerning labour laws, building codes, safety, etc., are the factors that demand attention. In order to have a balanced regional growth of industries, both central and state governments in our country offer the package of incentives to entrepreneurs in particular locations. The incentive package may be in the form of exemption from a safes tax and excise duties for a specific period, soft loan from financial institutions, subsidy in electrical energy charges and investment subsidy. Some of these incentives may tempt to locate the plant to avail these facilities offered.Climatic conditions The geology of the area needs to be considered together with climatic conditions (humidity, temperature). Climates greatly influence human efficiency and behaviour. Some industries require specific climatic conditions e.g., textile mill will require humidity.Supporting industries and servic es Now a day the manufacturing organisation will not make all the components and parts by itself and it subcontracts the work to vendors. So, the source of supply of component parts will be the one of the factors that influences the location.The various services like communications, verifying services professional consultancy services and other civil amenities services will play a vital region in selection of a location.Community and labour attitudes Community attitude towards their work and towards the prospective industries can make or mar the industry. Community attitudes towards documentation trade union activities are important criteria. Facility location in specific location is not desirable even though all factors are favouring because of labour attitude towards management, which brings very often the strikes and lockouts.Community infrastructure and amenity All manufacturing activities require access to a community infrastructure, most notably economic overhead capital, s uch as roads, railways, port facilities, power lines and service facilities and social overhead capital like schools, universities and hospitals. These factors are also needed to be considered by location decisions as infrastructure is enormously expensive to build and for most manufacturing activities the existing stock of infrastructure provides physical restrictions on location possibilities.Specific Locational Factors for Manufacturing OrganisationDOMINANT FACTORSFactors dominating location decisions for new manufacturing plants can be broadly classified insix groups. They are listed in the order of their importance as follows.Favourable labour climate A favorable labour climate may be the most important factor in location decisions for labour-intensive firms in industries such as textiles furniture and consumer electronics. Labour climate includes wage rates, training requirements attitudes toward work, worker productivity and union strength. Many executives consider weak unio ns or low probability of union organizing efforts as a distinct advantage.Proximity to markets After determining where the demand for goods and services is greatest, management must select a location for the facility that will supply that demand. Locating near markets is particularly important when the final goods are bulky or heavy and outbound transportation rates are high. For example, manufacturers of products such as plastic pipe and heavy metals all emphasize proximity to their markets.Quality of life Good schools, recreational facilities, cultural events, and an attractive lifestyle contribute to quality of life. This factor is relatively unimportant on its own, but it can make the difference in location decisions.Proximity to suppliers and resources In many companies, plants supply parts to other facilities or rely on other facilities for management and staff support. These require frequent coordination and communication, which can become more difficult as distance increase s.Utilities, taxes, and real realm costs Other important factors that may emerge include utility costs (telephone, energy, and water), local and state taxes, financing incentives offered by local or state governments, relocation costs, and land costs.SECONDARY FACTORSThere are some other factors needed to be considered, including room for expansion, construction costs, accessibility to multiple modes of transportation, the cost of shuffling people and materials between plants, competition from other firms for the workforce, community attitudes, and many others. For global operations, firms are emphasizing local employee skills and education and the local infrastructure.Specific Locational Factors for Service OrganisationDOMINANT FACTORSThe factors considered for manufacturers are also applied to service providers, with one important addition the impact of location on sales and customer satisfaction. Customers usually look about how close a service facility is, particularly if the process requires considerable customer contact.72Proximity to customers Location is a key factor in determining how conveniently customers can carry on business with a firm. For example, few people would like to go to remotely located dry cleaner or supermarket if another is more convenient. Thus the influence of location on revenues tends to be the dominant factor.Transportation costs and proximity to markets For warehousing and distribution operations, transportation costs and proximity to markets are extremely important. With a warehouse nearby, many firms can hold inventory closer to the customer, thus reducing delivery time and promoting sales.location of competitors One complication in estimating the sales potential at different location is the impact of competitors.Management must not only consider the current location of competitors but also try to anticipate their reaction to the firms new location. Avoiding areas where competitors are already well established often pays. However, in some industries, such as new-car sales showrooms and fastfood chains, locating near competitors is actually advantageous. The strategy is to create a vituperative mass, whereby several competing firms clustered in one location attract more customers than the total number who would shop at the same stores at at sea locations. Recognizing this effect, some firms use a follow -the leader strategy when selecting new sites.SECONDARY FACTORSRetailers also must consider the level of retail activity, residential parsimoniousness, occupation flow, and site visibility. Retail activity in the area is important, as shoppers often decide on impulse to go shopping or to eat in a eating place. Traffic flows and visibility are important because businesses customers arrive in cars. Visibility involves distance from the street and size of nearby buildingsand signs. High residential density ensures night time and weekend business when the populationin the area fits the firms competiti ve priorities and target market segment.BANKS PUNJAB NATIONAL BANKhttp//www.metlife.co.in/grfx/PNB_Logo.jpgBranches(ATMs) in southern delhiAndrews Ganjsheik SaraiKatwaria SaraiChirag DelhiSaketNew Friends ColonyMalviya NagarKotlaAlaknandaHauz KhasSarvodaya EnclaveYusuf SaraiGovind PuriKalkajiJiya SaraiDakshinpuri ExtnToday banks are performing all kinds of banking transactions and providing various financial services in order to make life easier for people. Customers are demanding speed and convenience in banking transactions, high efficiency and confidence in their investments and financing services with convenient limits and reasonable cost.Banks consider the demographic, economic and social characteristics of the geographical regions in branch site selection in order to provide the best financial services in line with their customers demands.Banks usually prefer regions with proportional advantage in terms of demographic, economicand socio-cultural characteristics when they are making decisions about opening or closing a branch at a region. However, they are faced with the question of which factors are more effective on selection of branch site with regards to regions. The determination of variables influencing branch site selection for regions would provide bank managers with effective insights into the selection of the most appropriate sites for opening bank branches. The banking sector in india has targeted making financial services more geographically widespread and accessible by increasing the number of branches and staff. India has cities and regions with very diverse developmental levels and the geographical distribution of the banking sector also shows a variety depending on the differences between the developmental levels of cities.RESTAURANT PIZZA HUThttps//encrypted-tbn3.gstatic.com/images?q=tbnANd9GcSQSBl-iSS5IMggqyTvnOBOqlCvhFKoqp9XQfADwFFFZVyk0Vl9 httphttps://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMDguDCiMDnaE9IJ-02OnLm3ZI5T7A8rtjobNBnRuNe0f6pdiDbo9EdGM2feJlSvWPegCM-10uxcL8nYXJ5XxYhp4Yk_eCT-3u93UiB3h2xaio3e-tMKp8SX9VfRj8FOPsENBEZhr1Kq2E/s400/Pizza_Hut_Logo.jp gOutlets in south DelhiThere are 10 outlets of Pizza hut in south delhi2 outlets in jet plane park1 outlet in Vasant ViharGreater KailashVasant KunjMalviya NagarLajpat NagarAlaknandaSaketNew Friends ColonyFactors affecting location facility of a Pizza HutPopulation natesAre there enough people in the area to support your business? For example, is the restaurant location in the heart of a thriving downtown shopping district, or along a busy freeway? There needs to be enough people who live in the area, or pass through the area on a regular basis to keep you busy. To determine the population base of a particular area, you can do a site study. Most people looking at their first restaurant dont have enough money in their budget for a professional survey. A less expensive method to determine the population base of certain area is to use a circle graph, as well as asking the local chamber of commerce and town office for more information.ParkingWill there be enough parking to accommoda te all the lay in your new restaurant? Ideally, a new restaurant location should have its own parking lot. If that isnt an option, is there public parking near the restaurant location?AccessibilityTheres a reason that major restaurant chains are often located near highway and freeway exits It makes them accessible for customers. Motorists can reach the restaurant without fighting traffic or driving out of their way. Most successful restaurant locations (but not all) are easy to find.VisibilityThis goes along with accessibility an dis very important for new restaurant locations. People have to know the restaurant is there. This is why property prices in downtown districts and developed strips are high than other areas. They offer a level of visibility that can bring in a great deal of walk-in business.Real-estate-valueThe real estate value of your location may be trending upward or downward and it helps to know what to expect. Higher property costs may involve a higher rent payment , but they may indicate a customer base with more disposable income to spend eating at your restaurant. Its important to address all these elements when you sit down to draft yourbusiness plan for a new restaurant, which you will need before applying for a loan. In addition, by understanding each of these elements, you can better choose the right location for your new restaurantRETAIL SHOP RELIANCE FRESHhttps//encrypted-tbn1.gstatic.com/images?q=tbnANd9GcRxB9XgM4dReU5R2H327DAXmv0erka-GmEmUksYyde0bmbQqJpR httphttps://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiD1lY9nYDyntgiAEQZkug7JBlN_FhyphenhyphenR26iZInY0hPFFQw-EjFBfP2l3OfF6QUA-W9u6gA-BFS9Dh_Bgchal3Qclt7MbHBcJrX9Ntqt4Iw22R7jHv-8HAlPrTQm0JXFgAaKioplPOV6N-I/s1600/Reliance+fresh+logo..jpgOutlets in south DelhiReliance freshArjun nagarLado saraiLajpat nagarTaimoor nagarFactors affecting facility locationLocation and Retail StrategyThe selection of a location type must reinforce the retailers strategy. The location type decision needs to be consistent with the shopping behavior and size of its target market and the retailers positioning in its target market.A critica l factor affecting the location consumers select to visit is the shoppi