Sunshine Fresh: Choosing a Business Location

In July 2014, the president and co-owner of Sunshine Fresh Inc. (Sunshine), a food service manufacturing company in Totowa, New Jersey, needed to make a decision about the best location for the company’s new West Coast expansion. Sunshine had built a strong reputation on the U.S. East Coast for high-quality refrigerated kosher pickles. Among Sunshine’s most valued clients were several casinos located in Atlantic City, New Jersey, and headquartered in Las Vegas, Nevada. Recently, a food purchaser for one these casinos casually mentioned to Sunshine’s vice-president that his casino’s customers in Las Vegas would love to have Sunshine’s pickles too. This brief exchange led to an expansion plan that required Sunshine to choose a location for its West Coast operation. The company’s managers had visited several cities in the Western United States to explore their options, and had carefully weighed the pros and cons of the two main contenders—Los Angeles, California, and Las Vegas, Nevada—against five essential criteria. Now, they needed a firm decision: Which metropolitan area was the best location for Sunshine’s new pickle plant?

This case is designed for an entrepreneurship or strategy course, and can be taught at the graduate, undergraduate, and executive levels. The case is meant to illustrate the strategic challenges and pressures associated with a location decision. As such, it highlights two countervailing forces on such decisions: product market size and access, and factor market costs. This case demonstrates the decisions and challenges of choosing an expansion location for a small yet growing company. After working through the case students will be able to do the following:<ul><li>Explain the interplay of state and local environments, agglomeration economies and diseconomies, and shipping logistics in shaping the comparative advantages and disadvantages of given locations for entrepreneurial ventures.</li><li>Systematically compare and analyze two or more locations for an expansion.</li><li>Understand the pressures faced by entrepreneurs in pursuing new growth opportunities.</li><ul>

• location choice, expansion, clustering