5.4 Location

Question 1

What are the factors in locating a business?

Answer 1

FLIMSTCCG
-Familiarity with the area
-Labour pool
-Infrastructure
-Markets
-Suppliers
-Type of land
-Costs
-Competition
-Government

Question 2

What is a pull factor

Answer 2

Pull factors are external factors that make it attractive for a business to set up or relocate abroad

Question 3

What are the 4 pull factors?

Answer 3

DDII
-Dismantling of trade barriers
-Deregulation of the world’s financial markets
-Increasing size of multinational companies
-Improved communications

Question 4

Why is dismantling of trade barriers a pull factor?

Answer 4

Reduction of trade barriers makes it easier to trade across borders

Question 5

Why is deregulation of the world’s financial markets a pull factor

Answer 5

Deregulation of the world’s financial markets makes it easy for transfer of large amounts of money

Question 6

Why is increasing the size of multinational companies a pull factor?

Answer 6

The size of multinational companies makes it easy for them to persuade countries to allow them to set up new operations there

Question 7

Why are improved communications a pull factor?

Answer 7

It is easier to transport products around the world & communicate with suppliers, customers etc.

Question 8

What is a push factor?

Answer 8

Push factors are internal factors that make it attractive for a business to operate abroad

Question 9

What are the 4 push factors?

Answer 9

RIUU
-Reducing costs
-Increasing market share
-Using extensions strategies
-Using defensive strategies

Question 10

How could relocating abroad reduce costs?

Answer 10

Relocating abroad could reduce costs since labour might be cheaper, might be closer to suppliers or tax rates might be lower

Question 11

How could relocating abroad increase relocating share?

Answer 11

Relocating abroad could increase market share since there may be more customers abroad

Question 12

How could relocating abroad allow businesses to use extension strategies?

Answer 12

Relocating abroad could allow businesses to use extension strategies because they may be able to extend the life cycle of their products elsewhere

Question 13

What are defensive strategies in terms of relocating?

Answer 13

A defensive strategy in terms of relocating is when you relocate abroad preventing your competitors from doing so first