4.5 Business Location Flashcards
All 11 cards in this deck
What factors influence where a business is located?
Costs, proximity to the market, labour, and materials.
Why might a manufacturer locate near its raw materials if they are bulkier than its finished product?
Transporting the bulky raw materials costs more than transporting the smaller finished products, so locating nearby lowers transport costs.
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 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.
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.
What is the main trade-off for a shop choosing a town-centre location rather than a cheaper site away from the centre?
A town centre is close to customers and gains passing trade (footfall), but rent and set-up costs are higher.
Why does transport infrastructure influence where a business locates?
Good road, rail, port and airport links, and fast broadband, keep the cost of moving materials and finished goods low and make communication easy.
Why might a business that makes fresh, perishable products locate close to its market?
Its products spoil if transported a long way, so being close keeps them fresh and allows quick delivery.
Why might a manufacturer of large, heavy products locate near its customers?
Large finished products are costly to transport, so being nearby cuts delivery costs and makes it easier to communicate with buyers.
Where is an online retailer likely to locate its warehouse?
Near good transport links, such as motorways, so orders can be delivered quickly and cheaply, rather than where shoppers pass by.
How do high site costs in a location affect a business's competitiveness?
Higher rents and land prices must be covered by the prices it charges, so it may be less competitive than rivals in cheaper areas.