5.4 Location

Question 1

Location

Answer 1

Geographical position of the business

Question 2

Quantitative factors

Answer 2

Fixed costs
- Size of Rent or mortgage

Labour costs
- Different parts of the country

Local Economy
- Unemployment rates (unemployment rate good - ppl look to work for u)

Distance to the market
- E.g. a factory’s costs of transportation production to retailers

Distance to inputs
- E.g. Oil refinery, steel manufacturing (Building your company near supplier for cheap and quick transport)

Government policies
- Subsidies, grants

Question 3

Qualitative Factors

Answer 3

Access to labour

Infrastructure
- Access to transport (deliver products overseas)
- Telecommunications (wifi)

Political and legal factors
- E.g. maximum working hours

Ethical, and environmental factors
- E.g. environmental laws and labour laws

Where is the competition
- Clustering of certain types of shops gathers customers

Room for expansion

Local Knowledge

Time factors
- Newspaper must be delivered to tell relevant news

Question 4

Outsourcing:

Answer 4

Transferring part of the business to an external firm rather than doing it within the business

Question 5

Subcontracting:

Answer 5

Transferring part of a contract to an external firm (sub-contractor)

Question 6

Insourcing:

Answer 6

Transferring part of the business that was outsourced to an external firm back to the business

Question 7

Offshoring:

Answer 7

Transferring part of the production process to another country
Either internally or to an external firm

Question 8

Reshoring:

Answer 8

Transferring part of the business that was offshored back home