SA’ADU ZUNGUR UNIVERSITY, GADAU

GSP 3322: ENTREPRENEURSHIP SKILLS

GADAU CAMPUS

UNIT 6:
Determining Business Location and Layout
Definition of Business Location

Business location refers to the geographical area where a business is physically situated, and
establishes its operations, in such a manner that it directly affects its accessibility to customers,
employees, and suppliers. The location has to significantly influences the operational costs,
customer access, and the overall success of the business (Kotler, 2012). It is the specific place
where business operations occur, influencing operational costs, proximity to customers, and
logistical efficiency (Drucker, 2014).

Factors to Consider When Choosing a Business Location

1. Proximity to the Market (proximity to customers): Businesses need to be easily accessible to

their target customers. For example, a retail store like Walmart chooses locations in densely
populated areas to attract more customers (Porter, 2008). Starbucks places stores in high-traffic
urban areas to attract more customers. In Nigeria, Shoprite situates stores in commercial hubs
like Ikeja, Lagos, Abuja, Kaduna and Kano where customer footfall is high.

2. Cost of Location: The cost of acquiring or renting a location is crucial. For instance, a tech
startup may opt for a location in a suburban area with lower rent, rather than a prime downtown
spot, to reduce costs (Zikmund et al., 2013).

3. Accessibility to Suppliers (Access to Raw Materials): Businesses need to be near suppliers to

minimize transportation costs and ensure timely deliveries. For example, a manufacturing
company might locate its factory near its raw material suppliers to reduce logistics costs (Barney
& Hesterly, 2012). Coca-Cola sets up bottling plants near sources of water, a key raw material.
In Nigeria, Dangote Cement builds plants near limestone deposits to reduce transportation costs.

4. Competition: Analyzing competition in a potential location is essential. For example, opening

a new coffee shop in an area already dominated by established brands like Starbucks could be
risky unless the business offers a unique value proposition (Grant, 2016).
5. Legal and Zoning Restrictions: Compliance with local laws is crucial. For example, a
restaurant must ensure the chosen location is zoned for food service and meets health and safety
regulations (Hatten, 2016).

6. Infrastructure Availability: Infrastructure is highly critical for both transportation of raw

materials into the business site and transportation of the finished/manufactured goods to the
various wholesale stores. For example, Amazon chooses warehouse locations based on proximity
to highways and airports. In Nigeria, MTN Nigeria places its towers in areas with strong
infrastructure to provide optimal network service.

Types of Business Locations

Generally, businesses can be located in either urban, suburban or rural areas due to either densety
population, nearness to raw materials or cheap labour.

Urban Locations: Businesses located in cities have access to larger customer bases but face
higher rent and operational costs. For example, Google’s offices in Silicon Valley provide access
to tech talent and partners. In Nigeria, GT-Bank’s branches in Lagos serve high-income, urban
clients.

Rural Locations: Rural areas offer lower costs and are ideal for businesses requiring large spaces
or proximity to raw materials. For example, Organic farms in rural France benefit from vast
arable land. In Nigeria, Olam Nigeria places agricultural production facilities in rural areas close
to farms.

On the basis of the above, business locations can further be categorised into the followings:

1. Commercial Areas: These areas are typically found in business districts. For instance, many
banks and corporate offices choose locations in commercial hubs like Wall Street in New York
(Thompson, 2012).

2. Industrial Areas: These are ideal for manufacturing businesses. For example, Detroit,
historically known as the “Motor City,” is an industrial hub for automotive manufacturing (Hitt
et al., 2017).

3. Residential Areas: Small businesses, such as local grocery stores or daycares, thrive in
residential neighborhoods because they cater to the everyday needs of the local community
(Drucker, 2014).

4. Virtual Locations: With the rise of e-commerce, businesses like Amazon operate virtually
without needing a physical storefront, allowing them to reach a global customer base (Laudon &
Traver, 2018).

The Importance of Location in Business Success

The location directly impacts a business’s access to customers, suppliers, and operational costs.
For instance,

The right location enhances customer accessibility, operational efficiency, and competitiveness.
Poor location choices can lead to logistical difficulties and increased operational costs (Kotler,
2016). For example, Amazon strategically locates its fulfillment centers near major highways to
optimize delivery times. Silicon Valley's proximity to top universities and tech companies has
made it a prime location for technology startups, significantly contributing to their success
(Davis & Desai, 2016). In Nigeria, Spar retail outlets are located in prime commercial areas to
attract more customers.

UNIT 7:

Business Layout

Definition of Business Layout

Business layout refers to the arrangement of physical resources and facilities such as machinery,
equipment, and staffs, within a workspace to ensure the efficient flow of operations (Chase et al.,
2020). It is considered as the organized physical setup of a business's resources to optimize
production, enhance workflow, and improve customer service (Drucker, 2014). A well-designed
layout ensures efficient workflow, reduces operational costs, and enhances both employee and
customer satisfaction (Slack et al., 2016).

Objectives of a Good Business Layout

1. Maximization of Space: Properly allocating space is crucial for avoiding congestion and
ensuring efficient operations. For instance, in a warehouse, effective space management allows
for easy access to inventory, which speeds up order fulfillment (Slack et al., 2016).

2. Improvement of Workflow: The layout should facilitate a smooth flow of materials,

information, and people. For example, an assembly line in an automobile factory is arranged to
minimize the movement of parts, which increases production speed (Heizer & Render, 2014).

3. Enhancement of Employee Productivity and Maximizing Efficiency: A comfortable and

organized workspace can significantly boost employee morale and productivity. For example,
Google’s open-office layouts are designed to foster collaboration and creativity among
employees (Davis & Heineke, 2011). A well-designed layout reduces bottlenecks and enhances
productivity. For example, Toyota’s lean manufacturing system organizes its production floor to
minimize waste and maximize output. Also, Nestlé Nigeria arranges its factories in a way that
supports streamlined food production, reducing downtime.

4. Improve Customer Experience and Satisfaction: Business layouts should create an inviting
environment that enhances customer satisfaction. In retail businesses, a well-planned layout
ensures that customers can easily find products and have a pleasant shopping experience. For
instance, supermarkets often place essential items like milk and bread at the back to encourage
customers to walk through the store, increasing the likelihood of impulse purchases (Levy &
Weitz, 2013). Apple’s stores have open, minimalist layouts that allow customers to interact with
products easily. The Palms Shopping Mall in Lagos uses a spacious layout with easy-to-navigate
stores for a positive customer experience.

Types of Business Layouts

1. Process Layout: This layout groups similar processes together, suitable for businesses with a
wide variety of services. In other words, facilities are arranged by similar processes or functions
rather than product flow. For example, in a hospital, there are distinct areas for radiology,
surgery, and emergency care, each equipped with specialized equipment (Heizer & Render,
2014). Thus, Hospitals organize departments (e.g., radiology, surgery) by specialized functions
to enhance efficiency. Access Bank organizes its branches into functional areas such as customer
service, loans, and cashier sections.

2. Product Layout: This layout organizes facilities based on the sequence of production
operations. It is designed for mass production, where layout arranges resources in a sequential
manner. An example is a car manufacturing plant where the assembly line moves the car through
various stations, from chassis assembly to final inspection (Slack et al., 2016). Dangote Sugar
uses a product-oriented layout to ensure efficient sugar processing from raw material to
packaging.

3. Fixed-Position Layout: In this layout, the product remains stationary, and workers and
equipment are brought to it. This is common in industries like shipbuilding, where the ship stays
in the dock while construction happens around it (Davis & Heineke, 2011).

4. Retail Layout: Retail businesses use layouts that optimize product placement and customer
flow. For example, IKEA uses a guided path layout to lead customers through their store,
showcasing all products and maximizing exposure (Levy & Weitz, 2013).

Importance of a Good Layout in Business Success

An effective business layout enhances workflow efficiency, reduces operational costs, and
improves employee productivity and customer satisfaction (Chase et al., 2020). For instance,
Walmart's optimized store layouts contribute to its success by allowing quick restocking and
better customer flow.

UNIT 8:

The Technical Components of a Business Plan

Definition of a Business Plan

A business plan is a comprehensive document that outlines the strategic, operational, and
financial aspects of a business. It serves as a roadmap for the business's growth and a tool for
securing investment (Hatten, 2016). In other words, A business plan is a formal or written
document that outlines the goals of a business, the strategy to achieve them, and the timeline for
implementation (Kotler, 2016). It is also seen as a comprehensive roadmap detailing the
operational, financial, and technical strategies of a business aimed at guiding its growth and
success (Drucker, 2014).

Key Technical Components of a Business Plan

1. Executive Summary: This section provides a concise overview of the business idea, goals, and
strategies. For example, a startup might summarize its innovative mobile app that aims to
revolutionize how users manage their personal finances (Hitt et al., 2017).

2. Product or Service Description: Here, the business describes what it offers, highlighting its
unique value proposition. For instance, Tesla describes its vehicles as sustainable and high-
performance alternatives to traditional cars, emphasizing the innovative electric technology
(Drucker, 2014).

3. Operations Plan: This component outlines the day-to-day operations, including the production/
manufacturing process, facilities, staffing equipment usage and supply chain. For example, a
bakery might detail its production schedule, sourcing of ingredients, and delivery logistics
(Grant, 2016). For example, Tesla’s operations plan focuses on scaling electric vehicle
production and optimizing battery technology. Interswitch’s operations plan outlines strategies
for maintaining its digital payment network across Nigeria.

4. Market Analysis: A thorough analysis of the market, including customer demographics,

competitors, and trends. For example, a new coffee shop might analyze the local demand for
artisanal coffee and assess competition from established chains like Starbucks (Zikmund et al.,
2013).

5. Financial Plan: This section includes financial projections, such as income statements, cash
flow statements, and funding requirements. A tech startup might project revenue growth based
on expected user acquisition rates and outline its funding needs to scale operations (Kotler,
2012).

6. Risk Analysis: Identifies potential risks and strategies to mitigate them. For instance, a
clothing retailer might identify risks like fluctuating fashion trends or supply chain disruptions
and propose contingency plans (Barney & Hesterly, 2012).

2. Technology Requirements: This section specifies the technological tools, systems, and
infrastructure needed to run the business. For example, Netflix uses cloud technology to support
its streaming service across global markets. Konga’s e-commerce platform relies on robust
payment gateways and logistics technology to serve its Nigerian customers.

Importance of the Technical Components

The technical components ensure that the business plan is feasible in terms of resources and
technology. Investors and stakeholders need to be assured that the business can be implemented
successfully using the proposed technologies (Kotler, 2016).

- Clarity: A well-structured business plan provides a clear roadmap for the business’s future,
helping to guide strategic decisions (Hitt et al., 2017).

- Funding: Investors and banks often require a detailed business plan to assess the viability of the
business before providing financial support. For example, a startup might use its business plan to
secure venture capital funding (Drucker, 2014).

- Benchmarking: The business plan serves as a reference point to measure progress and adjust
strategies as needed. For example, a company might compare its actual sales figures with the
projections in its business plan to assess performance (Zikmund et al., 2013).

UNIT 9:

The Strategic and Management Components of a Business Plan

Definition of Strategic and Management Components

These components define the long-term vision and the organizational structure necessary to
achieve the business's objectives. They ensure that the business operates efficiently and can adapt
to changing market conditions (Grant, 2016). While Strategic components involve the long-term
vision and direction of the business, including its goals, competitive strategy, and market
positioning, the management components focus on the organizational structure, leadership, and
human resource strategies needed to manage the business effectively (Grant, 2016; Barney &
Hesterly, 2012).

Key Strategic Components of a Business Plan

1. Vision Statement: The vision statement outlines the desired future position or long-term
aspirations of the business. For example, Nike’s vision is “to bring inspiration and innovation to
every athlete in the world” (Hatten, 2016). Dangote Group’s vision is to be a world-class
enterprise that is passionate about providing the highest quality goods and services.

2. Mission Statement: This statement defines the business’s core purpose and the value it
provides to customers and stakeholders. For instance, Google’s mission is “to organize the
world’s information and make it universally accessible and useful” (Barney & Hesterly, 2012).
3. Business Strategy/Strategic Objectives: These are specific, measurable goals that guide the
business toward its vision. It outlines the approach to achieving competitive advantage, whether
through cost leadership, differentiation, or focus. For example, Amazon might set a strategic
objective to increase its Prime membership by 20% annually (Kotler, 2012). Apple focuses on
product differentiation through innovative design and technology. GTBank employs a customer-
centric strategy with a focus on digital banking innovations.

4. Competitive Strategy: The approach a business takes to gain an advantage over competitors.
For example, Apple uses a differentiation strategy, focusing on innovation and premium products
to stand out in the market (Porter, 2008).

Key Management Components of a Business Plan

1. Organizational Structure: This describes how the business is organized, including the
hierarchy and roles. For instance, a small business might have a flat organizational structure with
few layers of management, promoting faster decision-making (Grant, 2016).

2. Leadership Style: The approach management takes to inspire and guide employees. For
example, Tesla’s CEO, Elon Musk’s leadership at Tesla involves a visionary approach, driving
innovation in the electric vehicle industry. Similarly, Aliko Dangote’s management of the
Dangote Group exemplifies effective leadership in Nigeria, focusing on large-scale
manufacturing and expanding into new markets.

3. Business Strategy: McDonald's adopts a global standardization strategy but tailors its menu to
local tastes in different regions, such as offering rice dishes in Asia. Also, Interswitch’s strategy
focuses on expanding its digital payment solutions across Africa, while investing in innovative
fintech products

UNIT 10:

Marketing Components of a Business Plan

Definition of Marketing Components

The marketing components of a business plan refers strategies a business uses to promote its
products or services, reach its target market and achieve sales. It encompasses market research,
pricing strategies, distribution channels, and promotional tactics (Kotler & Keller, 2016). These
components outline the promotional, pricing, distribution, and product strategies a business uses
to attract and retain customers in the market (Drucker, 2014).

Key Marketing Components

1. Market Research: Market research identifies customer needs, preferences, and market trends
to inform the business’s marketing strategies. For example, before expanding into the Indian
market, Netflix conducted thorough market research to understand viewing habits and preferred
content genres. Coca-Cola conducts extensive global market research to understand regional
preferences and develop localized products. Equally, Konga.com carried out market research to
identify consumer behavior and preferences, leading to tailored marketing campaigns in Nigeria.
Peak Milk conducts market research to tailor its products to the Nigerian market, focusing on
local tastes and nutritional needs.

2. Target Market: The specific group of consumers that the business aims to serve based on
demographics, preferences, and market trends to inform the business’s marketing strategies. For
example, Nike’s target market consists of athletes and fitness enthusiasts, with a focus on
premium performance gear. Indomie’s target market in Nigeria includes busy individuals,
especially students, who value quick and convenient meal options.

3. Pricing Strategy: the appropriate and affordably pricing strategy that will attract and ensure
customer maximizes his satisfaction from using a particular goods or services. For example,
IKEA employs a low-cost pricing strategy, making affordable furniture accessible to a wide
consumer base. Moreso, MTN Nigeria uses competitive pricing to attract new subscribers while
retaining existing customers through tailored data packages.

4. Promotion Strategy: a branded way of advertising a business product that will customers to
patronizes their product. For example, Coca-Cola uses global advertising campaigns, often
centered on happiness and community, to build a strong emotional connection with consumers.
Also, Peak Milk promotes its products through television ads and partnerships with local
influencers, creating a connection with Nigerian family values.

5. Distribution Channels: this is involving appropriate channels through which business’s

products get to the target customers. For examples: Apple distributes its products through a
combination of online stores, retail outlets, and authorized distributors worldwide. While
Dangote Cement distributes its products through an extensive network of distributors and
retailers across Nigeria, ensuring availability in both urban and rural areas.

Units 6 to 10 provide critical insights into key business components such as location and layout,
technical operations, strategic management, and marketing. Whether operating in international
markets or the Nigerian context, businesses must tailor these components to local conditions to
ensure efficiency, competitiveness, and growth.