Nature of Business Activity
Business: Cambridge International GCSE (2027 Exams), topic 4.4.2
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.
Test yourself on Nature of Business Activity
Who is more likely to need a retail store in a busy shopping centre?
Why would Sports Direct choose to be located in Derbyshire over London?
Location, Location, Location
Who is most likely to rent a space on a business park on the outskirts of a town?