True or False?
Locating in close proximity to competitors allows a business to take advantage of a shared customer base.
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True or False?
Locating in close proximity to competitors allows a business to take advantage of a shared customer base.
True.
Locating in close proximity to competitors allows a business to take advantage of a shared customer base.
What is meant by proximity to market?
Proximity to market is the distance between the business location and the target market.
True or False?
Locating near the market increases transportation costs.
False.
Locating near the market reduces transportation costs.
What does proximity to labour refer to?
Proximity to labour refers to the availability of qualified and skilled workers in the area.
True or False?
Online businesses rely on a fast and reliable internet connection.
True.
Online businesses rely on a fast and reliable internet connection.
In the context of business location, what is infrastructure?
Infrastructure includes transport and communication networks that allow for products to be supplied either physically or online.
True or False?
Loyalty to the area in which a business was established can override logical reasons for a business to relocate.
True.
Though there may be logical reasons for a business to relocate, loyalty to the location in which it was established can override these business decisions
Define the term outsourcing.
Outsourcing is when a business hires an external organisation to complete specific business activities on a permanent basis.
What is subcontracting?
Subcontracting is where specific parts of a larger project or contract are assigned to third-parties for the duration of the project or activity.
Define the term offshoring.
Offshoring occurs when a business sets up operations in another country to carry out certain business processes.
What is meant by the term insourcing?
Insourcing is where a business assigns tasks to individuals within the organisation which were previously outsourced.
What is reshoring?
Reshoring is when a business brings back its production activities to its home country from abroad.
True or False?
Outsourcing reduces costs for a business.
False.
While outsourcing can reduce costs, it may also lead to unexpected cost increases over time.
Gove one reason why a business may choose to outsource production.
Reasons a business may choose to outsource production include:
Reducing costs
Accessing specialised services
Improving efficiency
Focus on its core competencies
True or False?
Offshoring leads to job losses in the home country.
True.
While offshoring can result in domestic job losses, it can also lead to new growth opportunities and improved competitiveness for the business.
True or False?
Insourcing allows businesses to access extra capacity for short periods of time to manage seasonal demand.
False.
Subcontracting allows businesses to access extra capacity for short periods of time to manage seasonal demand.
True or False?
Insourcing allows a business to retain direct control over the quality of work being produced.
True.
Insourcing allows a business to retain direct control over the quality of work being produced.
Give two reasons why a business may choose to reshore its production.
A business may reshore for reasons including:
Cost considerations
Quality control
To protect intellectual property
To improve supply chain resilience
To operate in closer proximity to markets
True or False?
Businesses that move to a new location are often criticised for abandoning their commitments to the area they leave.
True.
Relocation leads to job losses, abandoned sites may become derelict and affect the environment, and local suppliers may face financial difficulties.