Decisions on location Flashcards
What are factors that influence the location of business in relation to proximity
Market, competitors, suppliers, labour
Explain why business must locate close to the market
Businesses that make large products locate close to the market to keep transport costs down
Services are sold directly to customers
Explain why the business must locate close to labour
Locate in locations where labour and wage rates are cheap
Certain locations are more suitable for certain types of skilled labour
Explain why the business must locate close to materials
Large amounts of raw materials that are difficult to transport can be easier to transport if premises are based close to sources
Cheap energy sources
Business that require large amounts of land may locate close to where premises are cheap, taxes are cheap and greenfield or brownfield sites
Explain why businesses must locate close to competitiors
Locate where competition is minimised to attract more consumers
Locate where comparison shopping is popular to catch the excess demand from existing businesses
Explain how services in terms of business activity impacts decisions on location
Ease of access and parking facilities
Choosing locations where there is less congestion and less delays
Explain how office based businesses decide where to locate
Ensure that there are sufficient facilities for employees
Locate in high profile cities to improve the image of the business
Explain how manufacturing and processing impacts a businesses decision on location
Labour intensive manufactuurers need to locate where there is a good supploy of skilled and cheap labour.
Some manufacturers locate close to energy sources to keep costs down.
Manufacturers that need large areas of land may choose to locate where land is cheap or where there is space in the outskirts
Explain how agriculture impacts a business’s decision on location
Fertile land to increase crop yield, where grass grows effectively to feed animals in farms, farmers who grow fruits need land that is sandy, well drained or tropical regions.
Fishers tend to locate close to the coast or different enviornments that different types of fish live in.
How does the internet impact business decisions on location
E-commerce provides businesses with flexibility, this means that they can locate anywhere with an internet connection.
Why does the government try to influence location decisions
To avoid congestion, this reduces strain on existing infrastructure
Minimise impacts on local communities
Encourage location in areas where unemployment is high to improve the distribution of jobs
To locate in assisted areas
To attract foreign manufacturers into the country
How does the government try to influence business decisions on location
Apply strict planning controls so businesses will have to gain official permission from authorities before they can begin trading.
Ban development in certain areas (usually to protect the environment)
Consultation and viability studies
How do trade blocs impact business decisions on location
A business may decide to locate in a trade bloc to avoid trade barriers.
What is fracking
The process of injecting liquid at high pressure into subterranean rocks so as to force open existing fissures and extract oil or gas
What are brownfield sites?
Areas of land that were once used for urban development
