13 Do you think MSH should relocate its business? Justify your answer. [6]

[BASEL Moderator]

MSH is a large business providing floor cleaning services to other businesses. It has many loyal employees. When a worker does leave, new recruits are trained using on-the-job training. MSH is located in an area with a high level of unemployment. MSH is experiencing falling demand and plans to increase promotion. The manager of MSH is thinking about relocating the business to Main city, which is 50 km away. Main city has many expanding industrial areas. The manager is worried about the effect of relocation on some stakeholder groups.

13 Do you think MSH should relocate its business? Justify your answer. [6]

Possible KN Points:
• Higher possible demand OR sales
• Demand will continue to be low in the current location
• Employees may not want to move
• Possible reaction OR high level of competition in new location
• Need to use promotion in new location
• Likely to pay low wage rates in current location