Detailed Analysis: Factors Affecting Bakery Location Decisions

This assignment provides a comprehensive analysis of the factors that significantly influence the strategic location of a bakery. It begins by ranking the importance of factors such as nearness to target customers, neighborhood mix, parking availability, labor pool accessibility, and security. The discussion delves into each factor, explaining their impact on sales and overall business success. The assignment further explores broader aspects of business location, including the importance of combining factors, the effect of footfall, distribution methods (direct marketing), and the financial implications of renting versus buying a location. Finally, it addresses governmental regulations, including food safety laws and labeling requirements, that bakeries must adhere to. The paper offers valuable insights for entrepreneurs in the food and beverage industry, highlighting the importance of strategic location decisions for a bakery's success.

Running head: FACTORS AFFECTING LOCATION OF A BAKERY
FACTORS AFFECTING LOCATION OF A BAKERY
Name of the Student
Name of the University
Author note

1FACTORS AFFECTING LOCATION OF A BAKERY
Table of Contents
Assignment 6.1...........................................................................................................................2
6.1.1 Discussion.....................................................................................................................2
Rank list.............................................................................................................................2
6.1.2 References.....................................................................................................................4
Assignment 6.2...........................................................................................................................5
6.2.1 Discussion.....................................................................................................................5
Business location................................................................................................................5
Factor affecting location of business..................................................................................5
Distribution method...........................................................................................................5
Rent or buy.........................................................................................................................6
Governmental regulations..................................................................................................6
6.2.2 References.....................................................................................................................7

2FACTORS AFFECTING LOCATION OF A BAKERY
Assignment 6.1
6.1.1 Discussion
For opening a bakery, consideration of a proper location is the most important factor.
There are several factors which affects the decision making process while choosing a suitable
location. Some of the factors are ranked below according to their importance, where rank 1
signifies the most important factor while choosing a location.
Rank list
Factors Ranks
Nearness to target customers 1
Neighborhood mix 2
Parking 3
Labor pool 4
Security and safety 5
 Nearness to target customers  Customer are important for food and retail
businesses. A bakery shop aiming for a high sales turnover needs to be located in such
an area where the footfall would be the maximum. Potential customers will only visit
the shop if it visible to them. Therefore, nearness to customers is the main priority for
a bakery business. The bakery should be located in such a place where the population
would be maximum such as near offices, hospitals, schools or any other cosmopolitan
area (Lee, Kim & Jung, 2014).
 Neighborhood mix  Neighborhood involves other retailers and restaurants, which
attracts customers in that area. The competitors can either become beneficial or
hindrance for the bakery. For instance, competitors in that area may have invested
huge amount of money to attract customers as a result the bakery shop need not invest

3FACTORS AFFECTING LOCATION OF A BAKERY
in advertising. Setting up the bakery beside another popular confectioners will help in
obtaining the excess customers of that shop. Analyzing the services offered by the
competitors will help in deciding the location. However if there are higher number of
competitors then it may pose as a threat for the new bakery. Therefore, neighborhood
becomes the second priority while choosing a location (Sadjadi, et al. 2018).
 Parking  Even if the bakery is located in a cosmopolitan area, the accessibility of
the location for every target customers should be analyzed. Ensuring whether the
location is accessible by car, train and bus. Analyzing the parking facility and space
when the location is on a busy street. It should be checked whether the suppliers and
employees could access the location easily (Karna, et al. 2019).
 Labor pool  In order to make the items easily saleable to the customers skilled
labors are required. Customers prefer food, which is appealing to them both taste
wise, and look wise. Therefore, the bakery should be located in an area where skilled
labors are easily available (Chase, 2015). Hiring the right person at the right place is
also mandatory. Therefore is another important factor while choosing a business
location as a location having a dearth of talents will lead to the downfall of sales.
 Security and safety  The rate of crimes in a particular area affects the business.
Therefore, a suitable location should be chosen where the rate of crimes are low. This
factor has been ranked as the lowest in terms of its importance because the chances of
crime occurring in a bakery shop is quite low. However as the rate of footfall will be
higher there are chances of shoplifting. To prevent shoplifting the shop can install
closed circuit cameras or hire a guard man.

4FACTORS AFFECTING LOCATION OF A BAKERY
6.1.2 References
Chase, K. A. (2015). Domestic geography and policy pressures. The Oxford Handbook of the
Political Economy of International Trade, 316.
Karna, M., Rai, A., Karki, B., Karna, L., Rai, M., & Adhikari, S. (2019). A Study On
Selection Of Location By Retail Chain: Big Mart.
Lee, K. S., Kim, E. J., & Jung, H. S. (2014). A study on the selection attribute of bakery
stores using correspondence analysis. Korean journal of food and cookery science,
30(4), 412-418.
Sadjadi, S. J., Gorji Ashtiani, M., Makui, A., & Ramezanian, R. (2018). A Mathematical
Model for Competitive Location Problem with Product Selection. Scientia Iranica.

5FACTORS AFFECTING LOCATION OF A BAKERY
Assignment 6.2
6.2.1 Discussion
Business location
Getting a perfect location for a bakery shop is possible by combining all the important
factors such as neighborhood, target footfall, accessibility, labor pool and security. A
commercial kitchen space and public area is required to start a bakery. Before finalizing any
location, a proper analysis of the area should be made such as the number of people visiting
that area daily, strategies undertaken by competitors to sell their products and availability of
considerable amount of space (Gaber, & Gaber, 2018). As the new bakery shop is aiming for
high sales volume, the shop should be located in an area consisting of hospitals and shopping
centers where the footfall will always be higher and shop can operate for all the seven days in
a week.
Factor affecting location of business
As the bakery is sales oriented rather than being profit oriented, the footfall of target
customers have the maximum effect on the business. An area with the maximum footfall
would become a suitable location for the bakery. Higher number of customers would means
that the bakery should have a sufficient space for accommodating the public. Therefore, a
suitable location should be chosen with space for sitting and an illuminant parking lot. As it is
a new bakery, it will be solely depended on its advertisements, as none of the people is aware
of the shop. Therefore, it should be located in such a place so that it is visible to the passer
byes.
Distribution method
A distribution channel is the process by which product is distributed to the customers
(Galkin, 2015). A distribution channel can be of two types, one that would depend on

6FACTORS AFFECTING LOCATION OF A BAKERY
wholesalers and retailers to make their products available to the end consumers and the other
is the direct distribution channel in which the manufacturers directly sell their products to the
customers. As the bakery is a small business unit therefore it will sale products through the
direct marketing channel. Customers will come to the shop and pick up their bread and
desserts. In cases like anniversary, wedding and birthday, the bakery will give delivery
services to their customers (Havas, 2016).
Rent or buy
Getting a location in a commercial area is difficult and most of the vacant spaces in
commercial area is for rental purpose rather than sale. Moreover, while setting up a new
bakery a huge startup cost is required and purchasing a facility at the start would become a
burden. Therefore, it is beneficial to rent a facility for setting up the bakery.
Governmental regulations
The amount of governmental interference for opening a bakery is minimum. There are
certain legal restrictions on the type of recipes it will be making for which the bakery need to
abide by the food safety laws. The bakery needs to follow the state laws to obtain the permit
and license for starting and running the business. Along with it, the bakery needs to provide
labelling on their products mentioning the ingredients they have used (Fitzpatrick, 2015).

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6.2.2 References
Fitzpatrick, L. (2015). Current regulation of food and beverage labelling in the USA. In
Advances in Food and Beverage Labelling (pp. 15-33). Woodhead Publishing.
Gaber, J., & Gaber, S. (2018). Qualitative analysis for planning & policy: Beyond the
numbers. Routledge.
Galkin, A. (2015). Distribution Channels Management in Different Regions. Management,
1(2), 92-96.
Havas, P. (2016). U.S. Patent No. 9,406,084. Washington, DC: U.S. Patent and Trademark
Office.