Business Location

A firm must choose a location that provides it with the best environment for it to produce and sell products most effectively. There are 6 main factors that influence where a business will choose to locate:

The availability of raw materials

How much this matters to a firm depends on what type of industry the firm operates in.
- For manufacturing firms, like the London Brick Co., being close to raw materials like clay deposits (used to make bricks) can cut the cost of transporting raw materials.
Some firms are less affected by their proximity and availability of raw materials. Access to clay deposits doesn't really matter for Facebook.

Labour nationally

Location affects wage rate and the level of labour skill.
Certain areas are more heavily focused on manufacturing and so the local workforce is skilled in manufacturing. Historically, Manchester was very strong in manufacturing and London has a large pool of software development labour.
In big cities, the wage rate is usually higher than in rural towns.

Labour internationally

Labour costs vary (are different) from country to country. In countries such as Sweden and Norway the minimum wage is very high compared to countries like China and India.
This is one reason why lots of companies (e.g. Primark and Nike) set up production plants in developing countries like Bangladesh.

Competition

Being near to competitors means that it is easier to find skilled workers because there are already local suppliers and there is already demand for this type of labour.
This partly explains why we see lots of similar businesses very close together in cities or on the edge of a busy town.
- In Canary Wharf, there are lots of banks (Barclays, Goldman Sachs and JP Morgan) and on the edge of towns there are often lots of garages or car spare parts firms.

Rent

Rent also varies a lot between different places. Renting floor space on a main high street in London will be very expensive relative to renting floor space in a smaller town like Keswick (in the Lake District).

Location of the market

How important it is to be located close to the market depends on the type of business that is running.
- A high street fashion store like Topshop will be more willing to spend extra money to be located in a shopping mall owned by Intu (relatively expensive) in the city centre of a city like Nottingham.
- This is because accessing a lot of customers who may want to buy Topshop clothes is important.

Business Location - Nature of Business Activity

Which factors are most important for a business when deciding where to locate depends on the type of business. Manufacturing, services and other industries will all find different things more important than others.

Low labour costs

A manufacturing firm is more likely to want to be located in an area with low labour costs to allow it to compete with the competition on price.
Sports Direct has lots of operations in Derbyshire partly because local labour is cheaper than places like London.

Price competition

Aldi competes with other supermarkets based on price. Because of this, it tends to choose cheap out of town spaces for its stores.

E-commerce

Amazon is an e-commerce firm. If deliveries can be made nationally or even internationally, the company’s location may be less important.
This means that Amazon is more likely to rent cheap out of town space unlike Zara which may choose prime rental space in a city centre.

1Enterprise & Entrepreneurship

1.1The Dynamic Nature of Businesses

1.1.1The Dynamic Nature of Businesses

1.1.2Risk & Reward

1.1.3The Role of Business Enterprise

1.1.4The Role of Business Enterprise 2

1.1.5The Role of the Entrepreneur

1.1.6End of Topic Test - Dynamic Nature of Business

1.1.7Grade 9 - Dynamic Nature of Business

1.2Spotting a Business Opportunity

1.2.1Customer Needs

1.2.2Market Research

1.2.3Market Segmentation

1.2.4The Competitive Environment

1.2.5Primary & Secondary Market Research

1.2.6End of Topic Test - Business Opportunities

1.2.7Application Questions - Business Opportunities

1.2.8Exam-Style Questions - Market Segmentation

1.3Putting a Business Idea into Practice

1.3.1Business Aims

1.3.2Business Objectives

1.3.3Business Revenues & Costs

1.3.4Costs - Calculations

1.3.5Revenue - Calculations

1.3.6Business Profits & Break-Even Analysis

1.3.7Profits & Losses - Calculations

1.3.8Interest - Calculations

1.3.9Cash & Cash Flow

1.3.10Cash & Cash Flow 2

1.3.11Cash Flow - Calculations

1.3.12Sources of Business Finance

1.3.13End of Topic Test - Business in Practice

1.3.14Grade 9 - Business in Practice

1.3.15Exam-Style Questions - Business in Practice

1.4Making the Business Effective

1.4.1The Options for Start-Up & Small Businesses

1.4.2Limited Liability

1.4.3Franchising & Not-For-Profits

1.4.4Business Location

1.4.5The Marketing Mix

1.4.6Business Plans

1.4.7End of Topic Test - Effective Business

1.4.8Application Questions - Effective Business

1.4.9Exam-Style Questions - Business Plans

1.5Business Stakeholders

1.5.1Business Stakeholders

1.5.2Technology & Business

1.5.3Legislation & Business

1.5.4Legislation & Business 2

1.5.5The Economy & Business

1.5.6External Influences

1.5.7End of Topic Test - Business Stakeholders

1.5.8Grade 9 - Business Stakeholders

2Building a Business

2.1Growing the Business

2.1.1Business Growth

2.1.2Finance

2.1.3Changes in Business Aims & Globalisation

2.1.4Ethics & Business

2.1.5The Environment & Business

2.1.6End of Topic Test - Growing a Business

2.1.7Application Questions - Growing a Business

2.1.8Exam-Style Questions - Business Growth

2.2Making Marketing Decisions

2.2.1Product

2.2.2Product Life Cycle

2.2.3Price

2.2.4Pricing Methods

2.2.5End of Topic Test - Product & Price

2.2.6Grade 9 - Product & Price

2.2.7Promotion & Advertising

2.2.8PR & Sales Promotions

2.2.9Sponsorship & Product Placement

2.2.10Promotional Mix

2.2.11End of Topic Test - Promotion

2.2.12Application Questions - Promotion

2.2.13Exam-Style Questions - Promotional Mix

2.2.14Place & Wholesalers

2.2.15Direct to Consumer

2.2.16E-commerce & M-commerce

2.3Making Operational Decisions

2.3.1Job Production

2.3.2Batch & Flow Production

2.3.3Working with Suppliers

2.3.4Effective Supply Chains

2.3.5Just In Time & Just In Case

2.3.6Managing Quality

2.3.7Total Quality Management

2.3.8The Sales Process

2.3.9End of Topic Test - Operational Decisions

2.3.10Grade 9 - Operational Decisions

2.3.11Exam-Style Questions - Managing Stock

2.4Making Financial Decisions

2.4.1Gross Profit & Net Profit - Definitions

2.4.2Gross Profit - Calculations

2.4.3Net Profit - Calculations

2.4.4Rate of Return

2.4.5Rate of Return - Calculations

2.4.6Research & Financial Data

2.4.7Marketing Data

2.4.8Percentage Change - Calculations

2.5Making Human Resource Decisions

2.5.1Organisational Structures

2.5.2Organisational Structures 2

2.5.3Recruitment

2.5.4Effective Recruitment

2.5.5Training a Workforce

2.5.6Motivating a Workforce

2.5.7End of Topic Tests - Human Resources

2.5.8Application Questions - Human Resources

2.5.9Exam-Style Questions - Human Resources

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