Slides in this set
MAIN FACTORS INFLUENCING BUSINESS
· Technology allows businesses to be more flexible, operating
from a wider choice of locations. It has encouraged the use of
teleworking. Needs to be considered how technologically
advanced the country in which the location is planned.
· Costs of factors of production land costs (rent), transport
costs and labour costs. Often to find the least cost site, allows
to minimise costs. Emerging economies have cheaper
manufacturing China, Russia.
· Infrastructure network of utilities such as transport links,
telecommunications systems and health and education
· Qualitative factors personal preference of directors or
FACTORS INFLUENCING LOCATION
· Resources location of raw materials and accessibility
in terms of wastage and transport. Location of suppliers
just in time methods.
· The market UK economy is based on tertiary
production. Customers want convenience and easy
access . Transport costs are saved if they locate close to
· Government intervention members of the EU must
regulate their regional policy within guidelines.
Assistance is provided in areas that have low levels of
economic activity and high unemployment.…read more
· The tendency to remain where a firm is even though the original reasons
for location no longer apply.
· Firms can benefit from external economies of scale e.g. a labour supply,
infrastructure, training, suppliers and customers, reputation of area.
· External diseconomies of scale e.g. congestion, pollution and shortages of
resources. These occur if one industry is concentrated in one area.
· Relocation can be disruptive despite a new location offering lower costs.
· Factors to consider if already has a base:
· Loss of skills developed in the existing workforce
· Lower morale and productivity
· Cost of relocation
· Redundancy payments
· Finding new suppliers and customers.…read more
METHODS OF MAKING LOCATION
· Investment appraisal does the location provide a quick
payback, a high ARR or a positive NPV?
· Qualitative factors
· Accessibility to leisure facility
· Types of leisure facility
· Quality of life
· Accessibility to good transport links for personal use
· Geographical attractiveness
· Availability of housing
· Opportunity to make a difference to local community.…read more
BENEFITS OF OPTIMAL LOCATION
· Improves competitiveness least cost site can assist
marketing strategy. A low cost location can help a business to
survive in times of economic difficulty.
· Providing a unique selling point using location to enhance
image e.g. Paris and Milan are attractive for fashion houses
because of their image.
· Increasing access to customers giving consumers easy
access to the business. This is important for retailing.
· Increasing flexibility suppliers located close to the
businesses requiring products or services. Companies
involved in lean production, time is important.…read more