Business Location (Edexcel GCSE Business)

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Steve Vorster

Written by: Steve Vorster

Reviewed by: Jenna Quinn

Factors Influencing Business Location

  • Choosing a good location can have significant impacts on a business, such as attracting customers, reducing costs, accessing skilled labor, remaining competitive, and enhancing its reputation

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Business locations are affected by multiple factors and if a business chooses the wrong location, it can fail

  • Proximity to market, labour, materials, and competitors influence the location decisions of a business

    • Proximity to the market 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

    • Proximity to labour 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

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

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

  • The nature of the business activity is also an important factor in location decisions

    • 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

  • The impact of the internet means businesses can reach customers from anywhere and physical location may not be as important as it once was

    • E-commerce businesses may choose to operate from a fixed location, but their location may not be as critical as it is for traditional brick-and-mortar businesses that rely on foot traffic

    • Providing customers with the opportunity to book services or purchase products online offers convenience and is likely to reduce business costs as premises in non-high profile areas are usually cheaper to rent or buy than high street or other busy areas

    • For businesses that offer a combination of online and in-person services (restaurants or retail stores), location remains an important factor in their success

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Steve Vorster

Author: Steve Vorster

Expertise: Economics & Business Subject Lead

Steve has taught A Level, GCSE, IGCSE Business and Economics - as well as IBDP Economics and Business Management. He is an IBDP Examiner and IGCSE textbook author. His students regularly achieve 90-100% in their final exams. Steve has been the Assistant Head of Sixth Form for a school in Devon, and Head of Economics at the world's largest International school in Singapore. He loves to create resources which speed up student learning and are easily accessible by all.

Jenna Quinn

Author: Jenna Quinn

Expertise: Head of New Subjects

Jenna studied at Cardiff University before training to become a science teacher at the University of Bath specialising in Biology (although she loves teaching all three sciences at GCSE level!). Teaching is her passion, and with 10 years experience teaching across a wide range of specifications – from GCSE and A Level Biology in the UK to IGCSE and IB Biology internationally – she knows what is required to pass those Biology exams.