Choosing a Production Location (DP IB Business Management)

Refers to the distance between the business location and the target market

Locating near the market reduces transportation costs and increases its accessibility to potential customers

 Refers to the availability of qualified and skilled workers in the area

Businesses often locate in areas with a high concentration of skilled labour to ensure that they have access to the necessary workforce to run their operations efficiently

Refers to the availability of raw materials and supplies needed for the business which will help to minimise transportation costs

May be desired (or not) to take advantage of a shared customer base or to differentiate themselves by offering unique products or services

Different types of businesses have different requirements in terms of space, infrastructure, and accessibility

• E.g. A manufacturing plant may require a large space for equipment and a loading dock for shipping and receiving goods, while a service business such as a law firm may require less space and more accessible office locations

Includes transport and electronic networks that allow for products to be supplied either physically or online

Online businesses rely on a fast and reliable internet connection

Good transport links provided by major trunk roads and efficient rail links are particularly important for businesses that require an effective logistics network

• E.g. An online fashion retailer will gain a competitive advantage if it is able to deliver products quickly to customers so the location of its distribution hub is likely to be close to the motorway network