Business Studies Chapter 21: Location Decisions

A set of flashcards covering key concepts related to business location strategies.

What is the definition of 'Location' in a business context?

Location is the site from which a business decides to operate, where it establishes its presence and functionality.

Why might a business consider relocating?

A business might consider relocating if it is setting up for the first time, if the existing location no longer meets its needs, or if a new site that is more attractive becomes available.

What advantages can a good location provide to a business?

A good location can reduce operational costs, increase sales, provide excellent access to customers, and facilitate access to a skilled workforce.

What are the potential consequences of choosing a poor location for a business?

A poor location may lead to increased costs, reduced customer interactions, and limited access to required human skills.

What are the factors that affect the location of a manufacturing business?

Factors include access to raw materials, proximity to key suppliers, availability of skilled labor, and transportation costs.

How does proximity to suppliers impact a manufacturing business's location decision?

Being located close to suppliers minimizes lead times and maintains product quality for manufacturing businesses that need to process fresh raw materials quickly.

Why might a business choose a location with high foot traffic?

B2C companies choose high foot traffic locations to attract more customers and increase sales opportunities.

What is the significance of access to a skilled workforce in determining a business's location?

Access to a skilled workforce allows businesses to operate efficiently and maintain productivity.

How do lean production techniques influence location choices for manufacturers?

Manufacturers using lean production techniques choose locations close to suppliers to minimize lead times and reduce waste.

Why do businesses selling perishable goods prefer to locate near their target market?

They ensure that products reach consumers while they are at their peak freshness.

What effect does the concentration of competitors have on high-tech businesses' location choices?

Hi-tech businesses often locate in areas with competitors to take advantage of skilled labor and innovation.

How can a good location influence a company's growth potential?

A good location can facilitate expansion by providing space, resources, and customer access.

What role does transportation cost play in the location decision for manufacturing businesses?

Transportation costs are significant as manufacturers of heavy goods may prefer locations near their end-market to minimize distribution costs.

What is the likely location strategy for B2B businesses compared to B2C businesses?

B2B businesses prioritize supply chain efficiency and access to partners, while B2C businesses focus on high-traffic areas.

What is a 'good location' for a business?

A good location provides favorable conditions including low costs, high customer access, proximity to suppliers, and a skilled labor force.

What are some potential risks of selecting a poor business location?

Risks include increased costs, difficulty attracting customers, poor employee recruitment, and negative impacts on profit margins.

What factors encourage research-focused businesses to locate near universities?

Access to innovative environments, academic talent, collaboration on research projects, and student engagement.

What financial incentives might governments offer to businesses locating in high-unemployment areas?

Governments may offer grants, low-cost loans, or tax incentives to stimulate economic growth and job creation.

What is the significance of high footfall locations for retail businesses?

High footfall locations attract more potential customers, leading to higher sales volumes.

What are some advantages of businesses locating in out-of-town premises?

Lower rents, reduced business rates, and access to incentives like local grants.