location of business. factors affecting manufacturing business external economies of scale -support...

LOCATION OF BUSINESS

FACTORS AFFECTING MANUFACTURING BUSINESS

• EXTERNAL ECONOMIES OF SCALE- Support businesses• MARKET- If add weight or is bulky or fresh eg. Drinks• WATER SUPPLY- Reliability, need large quantities?• RAW MATERIALS- Number of suppliers- Bulk, weight, fresh

FACTORS AFFECTING MANUFACTURING BUSINESS

cont.• POWER- reliability, near supply if large quantities• GOVERNMENT INFLUENCE- Incentives eg. Tax- Laws eg. Nuclear power• CLIMATE- eg. Silicon chips in dry environment• OWNER PREFERENCES- For small factories/individual owners• AVAILABILITY OF LABOUR- Labour intensive- Level of skills

FACTORS AFFECTING RETAIL BUSINESS

• SHOPPERS- Popular area draws more customers- Type of shopper eg. Income, gender, age• RENT- more central makes rent higher- Less popular areas have lower rentals• SECURITY- Crime rates can stop retailers- Gives increased costs thus lower profits• SUITABLE VACANT PREMISES- Space and availability

FACTORS AFFECTING RETAILING BUSINESS cont.

• CUSTOMER PARKING- Convenience increases sales- Lack of parking will decrease sales• SHOPS NEARBY- Attracts other customers- Competition can attract more customers• DELIVERY VEHICLE ACCESS- Access to delivery vehicle is NB due to goods

supply and leaving

FACTORS AFFECTING SERVICE BUSINESS

• TECHNOLOGY- Allows business to be located away from

customers eg. Call centre. Thus can take advantage of cheaper rents

• RENT- Essential services eg. Doctors can choose to

locate in low rent areas• CLIMATE- Affects business linked to tourism eg. Hotels• OWNER PREFERENCE- Owner can choose location often near where live

FACTORS AFFECTING SERVICE BUSINESS

• NEAR OTHER BUSINESSES- Supported by other businesses eg. Equipment

repairers near factories• LABOUR- Intensive thus near labour supply- Require skilled labour- Labour moves to where business is• CUSTOMERS- Near customer as quick response time needed- Unless minimal contact required

FACTORS AFFECTING MOVING ABROAD

• NO ROOM FOR EXPANSION• RENTS/TAXES RISING• GOVERNMENT GRANTS• GET AROUND TARIFF BARRIERS• NEW MARKETS OPENING UP• RAW MATERIAL SOURCE RUNS OUT• LABOUR DIFFICULTIES- Wages increase- Strikes- skills