component 1-11. location

explain the 5 factors that need to be considered when locating a new business

access to markets- could be near docks and shipping ports, so can possibly sell globally

competition- multipul similar shops could be near, resteraunts clothes shops ect

transportation- can customer or employees easily reach the location 

permits/regulations- if the business want/needs to expand 

price of renting in the area- new businesses with limited revenue may need to consider cheaper area 

why do footloose businesses seek out maximising economies of scale 

manufacturing businesses can seek out more efficient factories across the world to help reduce average costs. eg. clothing in vietnam and electronics in china 

why do footloose businesses seek out cost of transportation 

cost of transportation has dramatically reduced with the rise in containerisation. the average cost of shipping has fallen fron 25% of the selling price to below 5% 

why do footloose businesses seek out political factors and free trade 

trading blocks such as the eu and nafta allow free movement pof good across borders, businesses do not need to pay import or export taxes for selling products or buying raw materials 

why do footloose businesses seek out different taxes 

they can establish themselves where there are significant tax advantages