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Abstract
This paper proposes a discussion on criteria related to decisions to be made in order to choose the business location, signalling that approach might be different in case of small businesses (as compared to large companies) as well as in the case of service businesses, in particular small businesses active in hospitality industry (food and drink shops). Based on cases and observations as well as impact factors conf-^sideration, the author suggests that success of such a business (usually located in densely populated urban and/or well-known touristic areas) might depend on other factors than simply location. Selected examples from several countries are presented to make the case. The paper conclusions and implications are equally important for theorists and practitioners, as entrepreneurs, small business owners and owner-managers.
Keywords: business location, urban planning, small business, competitive advantage, customer satisfaction
Introduction
According to Porter, the financial success of a company within its industry (i.e. its profitability is above that industry average figure) depends on two types of competitive advantage this company might achieve, respectively: low cost or differentiation (Porter, 1985). If the competitive advantage is achieved on the long run then the company success is sustainable, based on sustainable competitive advantage. Combining the competitive advantage and the competitive scope (large or narrow), three generic strategies emerge (Porter, 1980: cost leadership, differentiation, and focus strategies. Note that focus strategy may be cost focus or differentiation focus (as result of a two-by-two strategy matrix).
Criticizing the popular by-then SWOT analysis - as lacking rigor from scientific standpoint - Porter has also developed the Five Forces Model (suppliers, buyers, substitution products, existing competitors within industry, and new entrants (Porter, 1979; Porter, 2008), known as microenvironment (industry environment) since. Along years, Porter's theory of five forces enjoyed both extensions (Brandenburger and Nalebuff, 1995; Bowman and Faulkner, 1997) as well as critiques: Coyne and Subramaniam (1996) argue that the five forces theory is based on questionable assumptions (as suppliers, buyers, and competitors are acting independently).
Reckoning the importance of strategy as path to success, Mintzberg, Ahlstrand and Lampel (1998) identified ten „schools of thought for strategy formation". However, based on sound consulting practice, they confessed that rigid strategic plans do not always work practice.
Aware of the challenges of the new millennium,...