CHAPTER 8 - Location

Question 1

Key location factors

Answer 1

• Costs
• Increased choice in international location
• Social reasons
• Infrastructure
• Labour
• Market and Competition
• Gov influences

Question 2

Costs

Answer 2

New businesses will have limited capital so they need to keep their costs low. The setting up of a new business will incur a number of location costs including:
• planning permission;
• purchasing or rental/leasing;
• refurbishment;
• business rates;
• labour costs;
• transport costs.

A new business may be unable to choose the ideal location for their business as they may not be able to afford the location costs so new businesses will often consider locating elsewhere, accepting that they are not selecting the optimum location. In the longer term they may have an objective to relocate when they have built up a customer base and have increased capital

Question 3

market and competition

Answer 3

market is the place where buyers and sellers meet

Retail location should be driven by access to customers, but there will be a balance between customer footfall and rental/lease costs.

Sometimes, being in close proximity to competitors, a business can benefit from their marketing efforts.