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Moscow

Department of Geography
geog@uidaho.edu
phone: (208) 885-6216
fax: (208) 885-2855
McClure Hall 203
875 Perimeter Drive, MS 3021
Moscow, ID 83844-3021

Lake Pend Oreille in Sandpoint, Idaho

Sandpoint Business Opportunity is All About Location, Location, Location

Location often is cited as the most important factor in deciding where to open a business. So why would manufacturing companies choose to locate in a region with high transportation costs, a relatively small labor market and at a great distance to most product markets in the U.S.?

That was the question posed by students in the University of Idaho’s geography course called Business Location Decisions, taught by Harley Johansen, head of the geography department.
The answer, it turns out, is quality of life.

This fall, students selected manufacturing companies in the Sandpoint area for their case study research on location choice and the important advantages or disadvantages of choosing to locate in a small, rather remote community in northern Idaho while competing in markets well beyond the region.

Students did case studies of 12 manufacturing companies in the Sandpoint area that produce products that range from wood pellets to roasted coffee to highly specialized encoder products. The companies range in size from seven employees to more than 450 and together employ nearly 1,000 people.

Of the 12 companies studied, at least 10 mentioned the environmental quality of Sandpoint as important in their decision to locate their plant there. Many of these companies moved their plants from outside the region, including southern California, because they were attracted by the living and working conditions in Sandpoint. Because most of the companies produce products with low transport costs and relatively high value, they can survive the Sandpoint location while satisfying a desire to live in a scenic mountain community with good outdoor recreation opportunities.

The findings of the student case studies suggest that small manufacturing companies are still competitive in the current economy and many are not tied to either raw material or market locations. Communities with attractive quality of life and available labor at reasonable rates can still compete for manufacturing jobs.