1.5 Business locations

Location is

Place where the business carries out its activities.

Is business location important?

Yes/ near to customer base/ depends on product

When business locations is not important?

When totally online (clothes shopping huge online market)

Factors influencing location

1. Type of business

2. Proximity to market (How close are you to your customers?

3. Availability of raw materials

4. Suitable supplies of labour

5. Competition

6. Costs

Types of business

Does your business need to be near your customer? Example : online business - cut down on location costs; barbers, pharmacies, butchers - need to be near to customers.

Proximity to market

How close are you to your customers? Convenience is the highest factor that most customers need (cinemas, food retailers, restaurants) but are willing to use online retailers for goods.

Availability of raw materials

Does your market require raw materials? What material are used and are they bulky? Example: apple juice manufacturers locate in areas with large quantities of apples.

Suitable supplies of labour

Businesses seek to locate where there are supplies of labour with the required skills and where wages are as low as possible

Competition

Sometimes businesses located near to competitors as they know that is where customers go to buy a certain product . In other cases such as petrol stations businesses may seek to locate away from rivals

Costs

Some businesses aim to keep costs as low as possible and locate in the cheapest place as possible. For other businesses, the cost of the location maybe the less important than having a prestigious place from which to the business.

How the factors influencing location are changing

1. Technology - technology has freed up many businesses from particular locations. It is easier to distribute products

2. Globalisation - it means when business spread all over the world. Businesses often look overseas because wages are much lower.