Location Decisions: The Main Factors Influencing The Location And Relocation Decisions Of A Business (Copy)
Cheat Sheet: 4.4.1 Location Decisions
Key Factors in Location
| Business Type | Factors | Example |
|---|---|---|
| Manufacturing | Near raw materials, transport links, low labour cost, government incentives | Car factory near steel suppliers |
| Service | Near customers, skilled labour, accessibility, competition levels | Bank branches in city centres |
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Business Studies Full Scale Course
Factors in Choosing Country
| Factor | Explanation | Example |
|---|---|---|
| Labour supply | Skills, cost, availability | Tech firms in India for skilled programmers |
| Market size | Larger markets = higher sales | Fast food chains in China |
| Government incentives | Tax breaks, subsidies | Factories in free economic zones |
| Infrastructure | Roads, ports, internet access | Singapore as trade hub |
| Political stability | Predictable environment | Firms avoid war zones |
| Legal controls | Labour laws, environmental rules | Strict EU safety standards affect factories |
Role of Legal Controls
| Legal Control | Impact |
|---|---|
| Zoning laws | Decide where industries can operate |
| Environmental laws | Restrict polluting industries near cities |
| Labour laws | Minimum wage, working hours affect costs |
| Health & safety | Standards raise costs but protect workers |
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Business Studies Full Scale Course
Relocation Reasons
| Reason | Example |
|---|---|
| Lower costs | Factory moving to country with cheaper labour |
| Access to new markets | Retailer opening stores abroad |
| Better infrastructure | Tech companies moving to areas with faster internet |
| Government policies | Tax incentives in free trade zones |
Recommending Location – Examples
| Business | Best Location | Justification |
|---|---|---|
| Furniture manufacturer | Near timber suppliers | Cuts transport costs |
| Luxury hotel | Tourist destination city | Close to customers |
| IT outsourcing | Country with skilled cheap labour | Reduces cost, ensures talent |
| Export business | Near port/airport | Efficient global distribution |
Quick Revision Bullets
- Manufacturing = focus on raw materials, costs, transport
- Services = focus on customers, accessibility, skilled labour
- Country choice = labour, market size, incentives, infrastructure, stability
- Legal controls affect location → zoning, environment, wages, safety
- Relocation = lower costs, new markets, better infrastructure
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Business Studies Full Scale Course