Unit 2
HO 2-5 (continued)cation should be noted. Location image can often be a strongdeterminant of reactions to and perceptions of the business.
For example, an upscale boutique, located in a deterioratedsection of the community may fail to attract the desired clientele, or a family restaurant will be seriously and negativelyaffected if it is
located in a high crime setting and buffered bybars on either side. The
image of the location should supportthe desired image of the business. Traffic patterns, demographics of the location, and the complementary nature of neighboring businesses are all factors that can
provide evidencesuggestingthe
relative strength of the firm's location.Facilities
Next, thefacilities should be evaluated. Facilities should
be viewedrather
broadly. A number of issues should be considered whendeveloping this rating. First, the firm's existing plant and equipment
should be examined, and a range of questions asked. Isthe physical plant large enough to handle the desired quantityof business operations? Has the business been able to avail itself
of the technical advances in plant and equipment necessary
toremain competitive? Is the equipment utilized by the businesstechnically and operationally sound and efficient? Part of thisanalysis should address the issue of capacity-Is
the businessoperating
near capacity or does significant excess capacity exist?Either condition could
be viewed as a potential weakness, depending on the growth projections of the business. Further,the actual physical layout and work flow should be explored. Forexample, do the facilities permit work to be arranged in themost efficient and productive manner?Access to
Suppliers
The firm's access to suppliersshould be evaluated. Here, two basicquestions emerge. The first concerns basic availability. Does thebusiness have ready access to the necessary raw materials andsuppliers? Availability must be tempered by cost considerations,ChapterTwo InternalAnalysis 79222