Location And Relocation

Question 1

3 Main factors influencing business location

Answer 1

Proximity

Nature of the business activity

The impact of the internet

Question 2

Proximity

Answer 2

Proximity to market ( how close the business needs to be to customers) are they required to visit the premises?

Proximity to labour (how close are suitably skilled employees)

Proximity to raw materials- this makes logical sense to manufacturers and saves storage costs

Proximity to competitors- can they avoid competition?

Question 3

Nature of the business activity

Answer 3

What the business does

Retail- close to customers, busy areas, competitors close by

Service- close to customers, determined by type of service, some can be located anywhere

Manufacturing- not close to customers,located closely to raw materials, good transport links

Question 4

Impact of the internet

Answer 4

E-commerce - low operating costs, access to a larger market, flexible working house, operate 24/7, bricks and clicks (operating in both)

Question 5

Other factors affecting location/relocation

Answer 5

external economies of scale

costs e.g. labour, land, utilities

availability of government grants

target market e.g. local, national, or international

quantitative techniques e.g. investment appraisal or break-even of different locations

corporate objectives and strategy

ethical and environmental considerations

infrastructure

legislation

political and economic environment.

Question 6

Offshoring

Answer 6

This is the process of moving business functions, such as production and IT support, abroad.