Business Location Flashcards
All 12 cards in this deck
Name the four 'proximity' factors that influence where a business locates.
Proximity to the market, to labour, to materials and to competitors.
Why might a business choose to locate close to its market?
So it can attract enough customers, e.g. a gym needs to be where people will join it.
Why might proximity to competitors influence a location decision?
A business may choose an area with little or no competition so it can win more customers.
Why might a business locate close to its labour supply?
So it can recruit enough workers with the right skills, and staff can get to work easily.
What is a bulk-reducing product, and where should its manufacturer locate?
A product smaller than the raw materials used to make it; the manufacturer should locate near the raw materials.
What is a bulk-gaining product, and where should its manufacturer locate?
A product larger than the raw materials used to make it; the manufacturer should locate near the market.
Where do retail businesses generally want to be located?
In busy areas close to their customers — except internet-only retailers.
What is infrastructure?
The facilities that support everyday economic activities, such as roads, phone lines and gas pipes.
How can the internet allow a small business to choose a cheaper location?
It can sell through e-commerce, so it does not need a physical retail outlet in an expensive area.
Give one location requirement that the internet creates for a business.
It needs a location with a good internet connection, as a weak signal would create barriers to communicating with stakeholders.
How does avoiding fixed premises affect a business's break-even point?
Fixed costs fall, so fewer sales are needed to break even.
True or false? All service businesses must be located close to their customers.
False. Some, such as taxi firms, must be near customers, but contact centres and web designers can locate anywhere.