Question

I selected IKEA for this assignment.

1. CONTINUING CASE ASSIGNMENT Evaluate the location of a store operated by the retailer you have selected for the Continuing Case. What is the size and shape of the retailer's trade area? Describe the positive and negative aspects of its location. Compare the store's location with the locations of its competitors.

Answer 1

We are taking an example of IKEA. It is one of the biggest brand in the furniture industry and selecting the location for the store is also very important to be decided to keep closure to the potential customers.

IKEA is in the business where you need to display their product to the customers. it is important because only than you will able to show the benefit of the product model you are manufacturing. There are below factors you need to consider when the company need to decide the location of the store:-

· Visibility to potential customers

It is important that you should establish the retail store at a location which is easily visible to the potential customers. People will see the options when they have a need of any sort of furniture. You need to be present every time in front of the customers. so that whenever, the need comes for customer than you will be present at that time.

· Location cost

If the cost of the location is higher than the cost of production will be higher as well. If your cost is at higher than that will have direct impact on the profit and price of the product. People usually buy product which is of low cost and good quality. So you have to make sure that your location cost is that much high.

· Area of retail store

IKEA is selling furniture which means they need huge space for the retail store area. So this is another factor that come in picture. Because if the area is huge which means they have to spend more money in buying the location.

IKEA need to consider at these points when they are deciding the location of their outlet or retail store. It is also important when you compare the location of your competitor as well. Below are the things you need to consider:-

· Parking space to the customers

It is important that you are providing the atleast parking space to the customers. so that people will not face problem in coming to the retail store of the company. This will give you extra edge from the competitors of your company because not all retailers will able to provide the same.

· Connectivity with public transport

It is better that your retail store is easily accessible to customers so that people can come to your retail store much easily.