1.4 Choosing the Best Location

Question 1

What factors are considered when choosing a location?

Answer 1

Cost of Site
Labour Costs
Transport Costs and closeness to suppliers
Sales Potential

Question 2

Describe/explain some of the factors considered when choosing a location

Answer 2

Cost of Site:
Businesses must assess the cost of buying or renting premises. For some shops, most expensive sites such as in city centres can be most profitable. The cheapest site isn’t always necessarily best

Labour Costs:
Cost will vary from region to region. If businesses can locate in an are with labour costs, this will be an advantage

Question 3

What are the main benefits of locating abroad?

Answer 3

Lower Site and land prices
Lower Labour Costs
Avoid Trade Barriers
Taking advantage of fast growing economies

Question 4

Describe/explain the benefits of locating abroad?

Answer 4

Lower Labour Costs:
Businesses that use a lot of labour can benefit from huge cost savings due to employing staff in low wage countries

Avoid Trade Barriers:
This helps companies to avoid controls put on them such as Tariffs

Question 5

What is a Tariff?

Answer 5

A tax for goods and services that are imported and also a form of protection

Question 6

Why would some UK Businesses decide to locate abroad in other countries?

Answer 6

Business needs more space/workers
Reduce costs
Expand - Leads to increase in sales/revenue