Unit 18

Question 1

Qualitative factors of business location:

Answer 1

○ Size of site.
○ Legal controls.
○ Infrastructure.
○ Ethical.

Question 2

Explain qualitative factor: Size of site.

Answer 2

Large enough for current needs of business.

Question 3

Explain qualitative factor: Ethical.

Answer 3

Effect on workforce due to relocation.

Question 4

Explain qualitative factor: Legal controls.

Answer 4

Restrictions in certain locations.

Question 5

Explain qualitative factor: Infrastructure.

Answer 5

Transport links: water, power and telecoms.

Question 6

What are the reasons and benefits of relocating to another country?

Answer 6

1) Achieve growth.
2) Reduce production costs.
3) Locate production closer to market.
4) Removed legal barriers and import tariffs.
5) Government incentives.

Question 7

Explain reason and benefits of relocating to another country: Achieve growth.

Answer 7

Sales may have reached maximum level in home market.

Question 8

Explain reason and benefits of relocating to another country: Reduce production cost.

Answer 8

Labor costs are less in third world countries.

Question 9

Explain reason and benefits of relocating to another country: locate closer to market.

Answer 9

Reduces delivery time to customers.

Question 10

Explain reason and benefits of relocating to another country: Removed legal barriers and import tariffs.

Answer 10

If a business has a branch in another country, import and export tariffs may be removed.

Question 11

Explain reason and benefits of relocating to another country: Government incentives.

Answer 11

Governments around the world support businesses from overseas allowing businesses to grow and also helping the economy.

Question 12

Factors of choosing location:

Answer 12

1) cost of land.
2) Distance from workforce.
3) Distance from customers.

Question 13

Quantitative factors of business production.

Answer 13

1) Cost of site.
2) Availability and cost of labor.
3) Transport cost.
4) Market potential.
5) Government incentive.

Question 14

Explain Quantitative factor of business production: cost of sales

Answer 14

Cost of rent.

Question 15

Explain Quantitative factor of business production: Transport cost.

Answer 15

How close the site is to the suppliers.

Question 16

Explain Quantitative factor of business production: Market potential.

Answer 16

Tertiary sector businesses need to be close to their customers.

Question 17

Explain Quantitative factor of business production: Government incentives

Answer 17

Incentives can allow businesses to set up branches for significantly lower prices.

Question 18

Limitations of relocating business to another country?

Answer 18

1) Cultural differences.
2) Communication problems.
3) Ethical concerns.
4) Quality issues.

Question 19

Explain limitation of relocating to another country: cultural differences

Answer 19

Product popularity may be different.

Question 20

Explain limitation of relocating to another country: communication problem

Answer 20

Language barrier and distance from head office may make communication difficult.

Question 21

Explain limitation of relocating to another country: ethical concern

Answer 21

Decision to relocate may affect workplace in home country, causing high levels of redundancy. Exploitation, child labor, low cost economies may also be caused.

Question 22

Explain limitation of relocating to another country: quality issues

Answer 22

Difficult to find quality of supplies and finished products in international markets.

Question 23

Role of legal controls?

Answer 23

When a business goes to a new country to start activities, there are some laws which the business may need to investigate and understand.

Question 24

Types of legal controls:

Answer 24

○ Building new premises requires planning permission from local government.
○ Areas away from local housing set up for businesses to be used, so that the businesses does not affect residents with noise or traffic.
○ Businesses are required to monitor and control the amount of pollution caused by its activities.
○ Businesses need to understand the laws set for employees to work in a business.

Question 25

Define: infrastructure

Answer 25

Basic facilities, services and installations needed for a business to function. Ex: water, electricity.

Question 26

Define: Government incentive

Answer 26

Actions taken by the government that help new businesses execute business activities.