After reading this article you will learn about the advantages and disadvantages of selecting the plant site in a city and in a small town.

Selecting the Plant Site in a City (Urban Site):


1. A city is very well connected by rail, road and air.

2. It provides a good market also.


3. Right labour force is available.

4. Power and water is easily available.

5. It has good hospitals, marketing centers, schools, banks, recreation clubs, etc.

6. The factory can be set up in an existing available building.


7. Workers’ and foremen’s training classes and many other educational facilities can be found in cities.

8. Services of experts and specialists are easily available.

9. Many other small industries existing nearby can work as ancillaries.

10. Security is there.



1. Land available for the building is limited in area.

2. Cost of land and building construction is high.

3. Expansion of the industry is seldom possible.


4. Local taxes etc., are high.

5. Labour salaries are high.

6. Union problems are more; employee-employer relations are not so good.

Selecting the Plant Site in a Small Town (More or Less a Rural Area):



1. Plenty of land is available for building construction and expansion purposes.

2. Land is cheap.

3. Unskilled labour is available which can be trained to suit the requirements of the concern

4. Employee-employer relations are good; no union problem.


5. Undesirable manufacturing neighbour’s are not likely to be present.

6. Municipal and other regulations and taxes etc., are seldom burdensome.

7. Government gives inducements as it wants to develop the underdeveloped areas.



1. Skilled labour is not available.

2. Rail, road and air links may not be there at all or may not be adequate.

3. Power is not available.

4. Rural areas are far from selling markets.

5. Hospitals, educational and amusement centres are not available.

6. Ancillary services cannot be obtained.


7. Expert and specialist advice is not available.

8. High grade executives may not like to live in rural areas.

An alternative between the Urban and Rural areas is the Suburban site which being a compromise between the two is probably the most suitable. It possesses the good points of both Urban and Rural locations.