1.4.2 - Buisness Locations Flashcards
A buisness wants proximity to key factors, such as
Market
Labour
Materials
Competitors
What is proximity to market and its importance?
How close a buisness is to its customers
Its importance depends on convenience for the customer.
(By choosing to set up in a particular location of business may look at the footfall of the location and research the demographics of the area to see if it matches their customers.)
What is proximity to labour?
This means how close a business is to workers. This can refer to the number of workers in the area and availability of workers with the right skills in the area.
Why might a business want to locate itself close to its labour?
Availability of workers in certain areas may also affect the wages that are business needs to pay.
For example, if a business needs to recruit a large number of unskilled workers they may choose to locate an area with high unemployment as this area should contain a large number of workers willing to work for the national living wage.
What is proximity to materials?
This means how close the business is to its materials.
Bulk gaining product
An end product that is bigger than the raw materials used to make it
Bulk reducing product
A product that is smaller than the raw materials it uses
What is proximity to competition?
This means how close a business is to its competitors.
Shopping good
A product that a customer takes time to consider before purchasing by looking at it and weighing up a number of options before choosing one.
Inertia
When a business is located in a certain area because that is where it was far set up and the business chooses to stay in that location.
Benefits of e-commerce
Lower operating costs
Ability to reach a wider audience
Ability to trade 24 hours a day seven days a week
Ability to respond to changing consumer buying habits
