Unit 1 - Business Activity and Influences on Business (Decisions on locations)

Question 1

Proximity to market

Answer 1

• Location close to customer traffic is important as its good for the customers (convenience) and good for the business as it may need more sales.
• There may be other services nearby that will be useful for the business employees.
  -Location depends on product: bulky or perishable goods manufacturers need to be close to their customers as the goods can’t go long distance.
  Consumer goods manufacturers can reduce the cost of transport by locating close to customers

Question 2

Start-up location

Answer 2

The start-up location depends on the type of business and the industry it’s in.
- Entrepreneur may decide:
- to work from home
- to start from a market stall
- to open an online business
- This would be wise to start small and grow the business.

Question 3

Proximity to labour

Answer 3

Important for a new business to locate to where there is an adequate supply of labour with the right skills.

Question 4

Proximity to materials

Answer 4

Closer to the raw materials, lower the cost of production.

Question 5

Retail

Answer 5

• Close to where shoppers go.
• Parking.
• Consider the rent or rates that they will need to pay.

Question 6

Service

Answer 6

• locate close to customers.
• Services rely heavily on people and so may look to locate close to a good supply of labour.

Question 7

Manufacturing

Answer 7

• Locate close to good transport links.
• Close to a good supply of skilled labour.
• Government grant.

Question 8

Office based businesses

Answer 8

Businesses such as marketing agency, consultants and financial services.
When selecting a location, they would typical look for the following:
- Sufficient facilities near by such as cafes, restaurants etc.
- Public transport or parking.

Question 9

Agriculture

Answer 9

The primary sector needs to ensure that their businesses are in areas that are suitable.

Question 10

Legal controls

Answer 10

Local and national governments may try and influence location decision such as;
- Reduce strain on local resources infrastructures.
- Protection of environment (Pollution, noise etc).
- Encourages locating in high unemployment areas (grants and incentives).

Question 11

Trading blocs

Answer 11

A trading bloc is an agreement between multiple countries to reduce or eliminate trade barriers between them.