ED665 Tourism and Service Industry Development

1
ED665 - Tourism and Service Industry Development

• Presentation Title
• Factors determining the location of service
  industries in U.S.
• November 7, 2008
• Presented by Cassie Hicks

2
Service Industries

• What are examples of service industries?
• Health care facilities, Call centers, Finance
  offices, and Insurance offices

3
Service Industries location factors

• How important is the physical location for
  chances of survival?
• Location of a firm, whether in urban or rural
• vicinities, can have important impacts on
  performance outcomes. Without the right location
  for it, businesses may find it hard to recoup
  their investment.

4
Service Industry Data

• The services industries, categorized as a
  non-good producing industry, account for 55
  percent of economic activity in the U.S.
• U. S. Census Bureau. Welcome to the Service
  Annual Survey.
• Retrieved November 5, 2008
• http//www.census.gov/econ/www/servmenu.html

5
Service Industry Data

• Most of these industries are surveyed in the
  Census Bureau Quarterly Services Survey and in
  the Service Annual Survey.
• U. S. Census Bureau. Welcome to the Service
  Annual Survey.
• Retrieved November 5, 2008
• http//www.census.gov/econ/www/servmenu.html

6
Service industries location factors

• Urban locations
• Often contain a wealth of diverse resources but
  may also have a greater number of competitors
• Rural locations
• May lack diversity but can enable the firm to
  exploit a niche with limited competition

7
Location Factors

• They do a market study first.
• Research, research, research, before you make one
  move. Its all about the data. Sales, growth, cash
  on hand, outstanding debt, competitors, etc
• Although location is not the only factor to
  consider, it must certainly be at the top!
• Yahoo! Answers. How do businesses decide on an
  expansion location? Do they
• use an outside firm? If so, which firms?
  Retrieved November 5, 2008
• http//answers.yahoo.com/question/index?qid200
  80926113817AAn0uMn

8
Basic Location Factors
9
Basic Location Factors

• Accessibility. Include a number of opportunity
  factors related to a location
• labor (wages, availability, level of
  qualification)
• markets (local, regional and global)
• materials
• Hofstra University Department of Economics
  Geography. Graphic of basic location factors,
  produced by Dr.
• Jean-Paul Rodrigue. Retrieved November 5, 2008
• http//people.hofstra.edu/geotrans/eng/ch7en/conc7
  en/locationfactors.html

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Basic Location Factors

• Site. Specific characteristics of the site
• the availability of land, basic utilities, the
  visibility (prestige)
• amenities (quality of life)
• the nature and level of access to local
  transportation (such as the proximity to an
  highway)
• These factors have an important effect on the
  costs associated with a location.

11
Basic Location Factors

• Socioeconomic environment. Specific
  characteristics that tend to apply to
  jurisdictional units and consider
• the availability of capital (investment,
  venture)
• varied subsidies
• regulations, taxation and technology

12
Service industries location factors

• The role and importance of each factor depends on
  the nature of the service activity.
• Minnesoto Department of Employment and
• Economic Development. Pictures. Retrieved
• November 5, 2008
• http//www.deed.state.mn.us.lmi/publications/trend
  s
• /0104/location.htm

13
Service Location

• Questions before choosing a location
• What do your customers look like?
• Define how you see your business
• About.com Retailing. Choosing a Retail Store
  Location.
• Retrieved November 5, 2008
• http//retail.about.com/od/location/a/selecting_si
  te.htm

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Service Location

• Do you know what you want services and or
  products you will offer for?
• Have you determined how much space and/or storage
  area you need?
• Can you visualize your building
• Where is your competition
• About.com Retailing. Choosing a Retail Store
  Location.
• Retrieved November 5, 2008
• http//retail.about.com/od/location/a/selecting_si
  te.htm

15
Service Location

• Some companies, like utilities and hospitals, are
  tied to their markets, so they rarely move
  (except perhaps to change offices within a metro
  area)
• Google.com. Site Location 101 How Companies
  Decide Where to
• Expand or Relocate. Retrieved November 4, 2008.
• http//www.google.com/search?hlenrlsGGLD,GGLD2
  004
• 15,GGLDenqfactor.....

16
Service Location

• Personal factors in location decisions
• Executives especially like to create a short
  commute for themselves.
• They may also locate for amenities such as golf
  courses or good schools for their children.

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Service Location

• For example, a study of 38 companies that left
  New York City found that 31 moved closer to their
  chief executives home, reducing the average CEO
  commute to eight miles. When the founder of
  Kinkos sold the company to a group of New York
  investors, the company moved its headquarters in
  2000 from Ventura, California, to Dallas, where
  the new CEO lived.

18
Summary

• They do a market study first.
• Research, research, research, before you make one
  move. Its all about the data. Sales, growth, cash
  on hand, outstanding debt, competitors, etc,.
• Although location is not the only factor to
  consider, it must certainly be at the top!
• Yahoo! Answers. How do businesses decide on an
  expansion location? Do they
• use an outside firm? If so, which firms?
  Retrieved November 5, 2008
• http//answers.yahoo.com/question/index?qid200
  80926113817AAn0uMn

19
Summary

• Service industry location factors
• Accessibility
• Site
• Socio-economic

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Questions???????
THATS ALL FOLKS!!!!
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Other References

• Ezine Articles. Factors That Affect a Good
  Franchise Site Location.
• Retrieved November 4, 2008
• http//ezinearticles.com/?Factors-That-Affect-a-Go
  od-Franchise-Site
• Locationid369187
• Canup Associates, Inc. Location Factors for
  Technology
• Companies. Retrieved November 5, 2008
• http//www.cit.ms/archive/gov_conf_2001/Canup.PDF
• Diverse Strategies. Selecting the right location
  for
• your business. Retrieved November 5, 2008
• httpwww.diversestrategies.com/Business_location.h
  tm

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Other References

• Portland Development. Strategy for Economic
  Vitality. Retrieved November 4, 2008
• http//www.portlanddev.org/programs/ed/strategy/PD
  Fs/appendix-2-3a.pdf
• Interview
• Scott. Emma Jean. 2008. Personal communication
• Interview
• Hicks, Ray. 2008. Personal communication
• Interview
• Smith, Johnnie. 2008. Personal communication
• Interview
• Anderson, Mitchell. 2008. Personal communication