Look at how well-known chain companies choose locations
Look at how well-known chain companies choose locations
1. Confusion about location selection for chain companies: lack of standardized location selection becomes an expansion problem
As we all know, location selection is a chain store The key factor for success, there is a famous saying in the industry: What is the most important thing about a store? The first is site selection, the second is site selection, and the third is site selection? This shows the importance of site selection for chain enterprises. A successful site selection system is one of the core competitiveness of chain companies. However, due to professional and experience limitations, the success rate of site selection for domestic chain companies has always been low. Through consultation and contact, we concluded that most chain companies have major problems in site selection. The following three levels of confusion:
1. Site selection is based on feeling, without scientific basis, and the risk is very high.
2. It is difficult to obtain store locations in mature business districts, and there is a lack of investment income forecasts, resulting in decision-making failure.
3. Lack of systems and specifications. Site selection becomes the biggest problem when expanding.
The first situation where location selection is based on intuition often occurs in small and medium-sized chain enterprises. The business owner judges the store location based on years of experience and intuition. Often the reason is unclear, and success or failure is often attributed to Feng Shui issues. When it comes to my own experience in site selection, most of it is based on fate or feeling. There is no scientific basis and the risk is very high. There was once such a story. When a female owner of a body-building chain introduced her experience in selecting a store, she proudly said: "You will know if you can open a store if you stand there and smell the air." ?As a result, when developing in Shenzhen, three stores in a row failed. Another business CEO talked about his experience in site selection and said that he would open a store in a place where there are many thieves. The result standard is completely unquantifiable. Most store owners rely on their own subjective experience and feelings when selecting sites. Since there is no scientific basis for investment, the risk is very high and it is mostly based on luck.
The chain companies in the second situation already have certain site selection standards and experience, and they also focus on strategic site selection and occupy a favorable position. However, prosperous shops often last for three generations and rarely change hands. Store locations in mature business districts are hard to find, and rents and deposits are high. If the investment income cannot be accurately predicted when choosing a store location, the rental cost will be higher than the profit rate of the industry. , will lead to store operation failure. There is another type. In order to reduce costs or avoid strong competition, some chain enterprises choose sub-commercial districts to deploy in order to implement the strategy of "surrounding cities from rural areas". They often fall into filling holes because they cannot scientifically and accurately predict the maturity opportunities of commercial districts. Or the consequences of getting married. Take the location of Oriental Home Building Materials Supermarket in Guangzhou as an example. As the first large-scale building materials and home furnishing chain store opened in South China, when Oriental Home located in Fangcun in 2004, it chose to develop in an immature business district at the urban-rural fringe. Gain income from future development of surrounding properties. However, because the location is too remote and surrounded by wholesale markets, the consumption level is low and the passenger flow is too little. The entire market requires at least 2 to 3 years of investment and cultivation to achieve positive results. Due to inherent deficiencies in location selection and flaws in business methods, after more than a year of hard work and seven months of closure, the Fangcun store was finally taken over by B&Q.
The chain industry must expand rapidly to reduce operating costs. The third situation often occurs when chain companies enter scale expansion. Due to the lack of establishment and improvement of site selection standards and specifications, the lack of organization and systems, Once stores are opened in batches and locations are selected, the staff is too busy to find the desired store locations, and the expansion plan has to be delayed repeatedly. The location selection eventually becomes the biggest obstacle to the expansion strategy. A representative case here is Laobaidian Pharmacy, which ranks first in the chain of drugstores. , after it entered Beijing, it took a six-person development team to "sweep the streets" and select locations for two years, and three general managers were dismissed, before finally opening a second store in Beijing, which delayed the development opportunity.
2. Analysis of successful cases: scientific site selection process and strict approval system
The confusion in corporate site selection mentioned above mainly stems from the lack of scientific and complete site selection standards. and systems, how to build a successful site selection system has become the secret to the success of chain enterprises. After decades of development, multinational chain giants such as Wal-Mart, Carrefour, McDonald's, KFC, etc. have formed a very scientific and rigorous site selection system when selecting sites, taking into account the city, building facilities, surrounding environment, road traffic, Population density, population structure, purchasing power, etc. are all quantitatively analyzed. On this basis, business district analysis and store opening calculations are carried out. Therefore, the success rate of site selection is very high, and its experience is worth learning from.
Take KFC as an example. KFC currently has more than 14,000 chain stores in the world, and has opened nearly 2,100 stores in China in a short period of time. Its success rate in site selection and investment is almost 100%. Its successful experience can be summarized in two aspects: Aspects:
1. Established scientific site selection process and standards. Usually after KFC enters the city, the location selection starts with the division and selection of business districts, and then the measurement and selection of customer gathering points, including the measurement of the flow of people in front of the store, and finally inputs this information into special computer software. You can complete the profit and loss calculation of opening a store, and clearly know how much the investment here cannot exceed, and if it exceeds the amount, the store cannot be opened.
KFC takes family members as its main target consumers. The focus of its promotion is young people who are more receptive to foreign culture and new things. The location of the restaurant mainly considers several factors such as geography, economy, market and customer sources. In line with its positioning, KFC has divided different business districts based on its own investigation of these factors, and selected the business districts that can be entered, and will only enter after the business districts are mature and stable. After selecting the business district, KFC strives to open stores in and near the places where most customers gather. In the selected business district, what are the flow lines of people, what direction do people go after getting out of the subway, etc. How many people pass by the planned store location per unit time. For these, people are sent to check the tables and take measurements. After a complete set of data is obtained, they are filled in according to the standards: business district and competition conditions table, leasing conditions table, on-site situation table, comprehensive evaluation table, etc., and the store location is determined based on the comprehensive score of the data.
2 Two-level approval system for site selection decisions. KFC has its own clear site selection principles and plans. In order to ensure the success rate of site selection, the site selection process must be approved by two committees, one is the local company and the other is the headquarters. The headquarters masters the site selection system software and has accumulated a large amount of data and With experience in site selection, we can make accurate and efficient decisions, effectively protecting the KFC brand and the confidence of franchisees. Compared with the ups and downs of domestic fast food chains, a successful site selection system is one of the magic weapons for foreign fast food such as McDonald's and KFC.
The development of site selection systems for multinational chain companies such as KFC and McDonald's is very mature. The site selection system has been IT-based and software-based. It has now developed to the application of geographic information system GIS software for site selection and store expansion of new stores. The layout optimization stage of outlets. How to effectively learn, imitate and surpass them, and successfully build a chain location system is a topic that domestic chain companies must study. Once there is an effective breakthrough in the site selection system, it will greatly accelerate the success of the chain business. Take the development of Gome's site selection system as an example.
At the beginning of 1996, Gome was still a private enterprise with a turnover of only 500 million yuan. In order to accelerate its development, Gome chose Wangfujing Mall to open a store of nearly 3,000 square meters. At that time, the pre-opening advertising fee reached 100. However, after opening, we discovered that: the rent was too high and operating costs remained high; the transportation was inconvenient, as it was close to the night market, which caused traffic jams and trucks could not enter. Most of the people who shop in Wangfujing are outsiders, and their shopping direction is not home appliances and other products. The problem of location selection forced Gome to terminate the contract early and withdraw from Wangfujing. The site selection mistake of Wangfujing Mall made Huang Guangyu realize the importance of chain operation standards and processes. So he presided over a careful summary of Gome's development experience in the past ten years and compiled the "Gome Business Manual", which standardized the location selection standards for chain stores as follows:
(1) Area: According to the company's business varieties And business scale, the display scale should maintain an appropriate business area. In principle, the business area should be greater than 2,000 square meters, of which the attached turnover warehouse area should be greater than 300 square meters. (2) Floor: In principle, only the first floor is selected, and the first floor and second floor can be considered. (3) Transportation: A commercial area with no less than 20 parking spaces and convenient public transportation is the best. (4) Term: The lease term should be more than 5 years and less than 10 years.
With the standardization and use of the "Gome Business Management Manual" in other places, Gome's chain experience was quickly copied to Tianjin, Shanghai, Chengdu, Chongqing, etc. With a standardized foundation, Gome's nationwide expansion speed is guaranteed. Moreover, the management level of each region has been effectively guaranteed.
In 2002, Gome hired a professional consulting company to upgrade its operating system. After professional consultation, Gome has formed a complete business standardization system, and site selection has also evolved from the original simple assessment requirements to a scientific standardized assessment and business forecast. Tools and forms required for store site evaluation include: electrical appliance store approval work flow chart, electrical appliance store project application and approval form, electrical appliance store optional store basic situation table, urban status survey form, business district status evaluation form, store structure and facility assessment Table, traffic and radiation situation assessment table, annual operating situation forecast table for newly opened stores, lease contract approval form, house rental contract, store rental area measurement table. Relying on a scientific site selection system, Gome has expanded rapidly with an average of more than 100 stores per year. The new site selection system has effectively reduced costs and ensured the success of the strategy. Site selection has become a core business fully controlled by the headquarters, and a dedicated department has been established at the headquarters. The Site Selection Department also forms a three-level review and management system for site selection. Gome's regulations on site selection review are as follows: the company president is responsible for the final approval of new store site selection; the chain development department is responsible for the supervision and review of new store site selection; the branch chain development department is responsible for the new store site selection work; the region is responsible for branch new store site selection. Review of store location selection.
As we all know, opening a store is the only way for chain enterprises to expand their business. The quality of the location has a decisive impact on future turnover. Therefore, choosing a good store and seizing good spots are the secrets to the development of chain enterprises. ;