Transportation Costs Essay
This is one of the most relevant areas in terms of selecting a new location. When locating in a new area there will always be new costs, whether it is transporting goods from source to site or goods from the site to the customers (Slack et al, 2001). By locating in Exeter this offers quick and cheap transport of goods from source to site, because it is sourced only 27 miles from its HQ in Dartington (). Riverford have recently successfully opened a farm store on the outskirts of Plymouth, which is 25 miles away from HQ.
They used the fleet of vans they have to distribute their produce from source to store, this will be similar with operations in Exeter. Glastonbury offers a slightly more complicated issue, being situated 85 miles away from HQ. It may be an issue transporting goods to the site in large loads, because it will involve higher fuel costs, possibly new vans and wages. By moving to Glastonbury offers further integration across the UK, using this location as a new hub for their box scheme, helping improve efficiency of their distribution across the UK. Speed of access
Speed of access will be the critical factor and
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This would retain the high quality of their products and help them expand further. Riverford may be sole owner of the farm or partnership with an existing farmer in the area. Large start up costs for a new farm could be a downside, but other benefits may accrue and outweigh this. Community Factors These factors have an influence on an operation’s cost and derive from the social, political and environmental side(). If locating an organic farm shop in Exeter, it is unlikely that Riverford will gain any government financial and planning assistance.
However a venture in Glastonbury if they were to open a farm shop with supporting farming operations, is eligible for a grant from the European Agricultural Guidance and Guarantee Fund (ec. europa. eu,2002) which finances farmers looking to diversify production and activities and development of social and economic activity of rural areas, which Riverford also looks to promote. Financially, this is an incentive for their expansion and services to new consumers. Local Attitudes to internal investment Exeter is a city, so it is likely to offer a neutral attitude towards Riverford’s expansion.
This is a major issue because Riverford looks to move into areas likely to promote healthy living and ethical responsibility. Glastonbury offers a more compatible culture, already offering an environmental awareness. For example, Veggies a vegan restaurant in Glastonbury gained a number of awards through their ethical standards, which has helped it succeed in this environmentally friendly area (veggies. org. uk,2010). Organizations like Veggies offer great potential for Riverford, because they will be interested in the fresh, vibrant and quality products they offer.
That such organizations are succeeding in the area suggests that Riverford will have a place in the market here, and a potential customer base to back this up Demand-side influences Suitability of site Exeter provides a much larger population however the people interested in the organic products produced by the farm are going to be hard to market to. Providing an out of city farm shop on the outskirts of a city has been a success in Plymouth , however Exeter may provide further issues.
The congestion/traffic coming in and out of the city in the early mornings, at weekends and also early evenings may provide a big problem in terms of ability to trade and their ability to transport goods to the site. However, we see a positive side for surrounding villagers’ accessibility to the out-of-town store. Glastonbury provides a pleasanter situation , the culture here offers greater potential with the customer base more likely to be interested in the fresh organic products. Cheaper land is a plus here.
Farms need lots of land so this provides an incentive to locate here. Tourist attractions such as Glastonbury Festival (which has previously been a success for Riverford stalls), will offer new business prospects. Image of the location Glastonbury’s humble hippy culture gives Riverford a great stepping stone for expansion. Customers associate Glastonbury with an environmentally and ethically friendly environment. Customers will expect to find an organization of Riverford’s calibre here.
This positive image rubs off well for Riverford and could really help in capturing new areas when expanding. Compared to Exeter this is a complete contrast. Exeter is an urban area, offering no signs of an ethically or environmentally friendly area. This organization will not enhance the positive image it seeks by locating outside of Exeter. Customer convenience Farm shops do not offer great convenience as they are situated in the country, the two locations selected are situated only a couple of miles outside densely populated areas.
However locating a farm shop out of town is what people want to see as it offers rural authenticity. Locating in Exeter offers a less convenient location because it is outside the city, people will have to get out of the city in order to purchase products. This may in turn cause problems because of traffic and congestion. The Glastonbury store is also located in a rural area out of the main town, however customer in this area expect to travel for good quality products to fulfil their needs.