Nothing can tank a business strategy faster than a site selection error. So much of a business’s operational success is affected by location. If you’re a manufacturer, proximity to markets and suppliers are key. Office operations need to find an adequate and appropriately skilled labor force. These are critical location factors. But, the relative importance of critical location factors will vary for each business operation. This is why, at SCOUT Economics, we start the site selection process with a thorough analysis of your Company’s current operation and its go-forward business strategy.
Your senior management has a wealth of knowledge of your business, trends in its industry, its competitors, past successful strategies and failures. All of that knowledge is brought to bear on this vital site selection process. SCOUT Economics provides a rigorous framework for applying this knowledge with the support of detailed proprietary geographic data to support the site selection decision.
Senior management is asked to step away from their day-to-day responsibilities for a few hours, to consider what is most important about a location to their business success. We perform an in-depth survey of key operations staff to determine what is important, and then we ask them to rank the most important location factors. Every possible location represents a unique set of trade-offs among the critical location factors for your business operation.
No one location will offer everything at its optimal level. For instance, proximity to agricultural feedstocks will not correlate well with pools of high-skilled biotech engineers. Just as cheap electricity does not correlate well with proximity to international airports. Your company’s operation will thrive under certain trade-offs and fail under others. The “right” location for your company will depend on your finding the best trade-offs among its unique location factors.
Occasionally we are approached by a company that has already come up with a candidate for their new location based on anecdotal evidence and their senior management’s collective knowledge and experience. They ask SCOUT Economics to test their candidate against all the other possibilities. They want to be certain there isn’t a better “fit” somewhere out there that has been overlooked by their internal team.
SCOUT Economics avoids overlooking optimal locations by casting a wide geographic net. Then, we use the company’s unique business strategic and cost factor profile to boil down the full candidate list to a handful of the “best” sites. Most often we find that their favored candidate ranks quite high among all the possibilities, but we are able to present them with a handful of others that are just as good, or even better.
Our analysis is valuable to the company, even if they go with their initial candidate, since it provides them with a solid quantitative analysis that supports their decision. They can go to their shareholders with an iron-clad rationale for selecting the site they chose, knowing its strengths and weaknesses and exactly how it stacks up against other high-ranking candidates.