5.4 Location

Question 1

Location

Answer 1

geographical place that the business is actually located

Question 2

quantitative factors that affect the location of a business

Answer 2

• cost of rent/mortgage
• labour costs
• government policies
• distance to the market/inputs

Question 3

Qualitative factors that affect the location of a business

Answer 3

• near to potential employees
• infrastructure
• political and legal factors e.g. max work hours / environmental laws
• where is the competition
• room for expanding premises

Question 4

offshoring

Answer 4

transferring part of the business to another country

either internally or to an external firm

Question 5

pros of offshoring

Answer 5

• potentially access cheaper labour costs
• avoid import tariffs
• access to specialized labour
• timezone benefits

Question 6

cons of offshoring

Answer 6

• lose some control over the part of the business
• culture/language differences
• possibility of negative publicity
• possibility of lower quality