Location

Question 1

What is the most important factor for location for new businesses?

Answer 1

Costs

New businesses may not be able to choose their ideal location due to cost constraints.

Question 2

What are the advantages of selecting expensive locations?

Answer 2

• Best access to footfall
• Better advertising opportunities
• More space and facilities
• Proximity to carparks and travel routes

Expensive locations may enhance business visibility and accessibility.

Question 3

What are the disadvantages of high location costs?

Answer 3

• Big impact on capital
• Big impact on cash flow
• Opportunity cost

High costs can strain financial resources and limit operational flexibility.

Question 4

What are the advantages of being close to the market?

Answer 4

• Attract customers
• React to changing demand
• Respond to customer needs

Proximity to the market can enhance customer engagement and adaptability.

Question 5

What are the disadvantages of being close to the market?

Answer 5

• More expensive goods from suppliers
• Time-consuming procurement

Proximity may lead to higher operational costs.

Question 6

What are the advantages of locating near competitors?

Answer 6

• May not be over saturated
• May attract customers

Being near competitors can create a competitive market atmosphere that draws customers.

Question 7

What are the disadvantages of locating near competition?

Answer 7

• May need to locate in less lucrative area
• Risk of losing customers

Competition can lead to reduced profitability if not managed well.

Question 8

What are the advantages of locating near availability of labor?

Answer 8

• Greater availability of labor usually means lower costs

Proximity to labor sources can enhance operational efficiency.

Question 9

What are the disadvantages of locating near availability of labor?

Answer 9

• Skilled staff may be farther from customers
• Increased costs if away from customers

Balancing labor availability with customer proximity is crucial.

Question 10

What are the advantages of being close to suppliers?

Answer 10

• Reduce transport costs
• React more quickly to demand

Closer supplier relationships can streamline logistics.

Question 11

What are the disadvantages of being close to suppliers?

Answer 11

• Could be more expensive to transport goods to customers
• Time-consuming processes

Proximity to suppliers needs to be weighed against customer delivery costs.