Service Operation Management (S.O.M)
Topic 3: Service Facility Location
Strategic Location Consideration
- Competitive Clustering
- A reaction to consumer buying behaviour (when choosing among competitors)
- Consumers like to make comparisons
- Seek out area where many shops selling similar products are concentrated (for convenience)
eg. Auto dealers (Alexandra Road), Sporting goods (Queensway), IT goods (Sim Lim Square)
- Saturation Marketing
- Idea is to group outlets of the same firm near each other in high traffic areas
eg. MacDonald's, 7-11, etc
Factors to Consider when Selecting Location for Overseas Business
1.Government Policies and Regulations
- Rules
- Political Risk
- Policy
- Attitude
- Exchange Rates
- Taxes
2.Economic & Social
- GDP
- Purchasing power
- Culture
3.Market
- Locations
- Size
- Demand
- Competition
4.Infrastructures
- Air & sea ports
- Telecommuncations
- Roads
- Costs
- Rental
- Transportation
- Supplier
- Availibity
7.Labour
- Workers and management staff
- Availability
- Productivity
- Cost
Site Selection Factors
- Access
- Convenient to expressways
- Accessible by pubic transport
- Visiblity
- Availability of sign placement
3.Traffic
- Traffic volume in that area might increase potential sales
4.Parking
- Adequate parking
5.Expansion
- Room for expansion
6.Environment
- Immediate surrounding should complement the service
7.Competition
- Location of competitors
8.Government
- Zoning restrictions
- Taxes
9.Labor
- Available labor with appropriate skills
10.Complements
- Complementary services nearby
Cross-Median Approach for a Single Facility
Step 1:
Plot the points of a graph with x&y axis
Step 2
Calculate the median
eg. 1+2+3+5 / 2
Step 3
- Map out X coordinates from both left and right directions
- Move the line until cumulative "w" is equal to or more than median
Step 4
- Map out Y coordinates from both left and right directions
- Move the line until cumulative "w" is equal to or more than median