3Business LocationIn general a business will look to locate its activities where the costs of production are minimisedThe nature of the business will heavily influence location decisions:Type and nature of marketType of business – production of goods or services, retail, wholesale?Sector – primary, secondary, tertiary, quaternary?
5Quantitative FactorsFactors that can be measured using quantitative techniques:Decision treesInvestment appraisalCritical Path Analysis, etc.Generally associated with the costs of production:
6Cost Fixed Costs Variable Costs Site costs Availability of grants/subsidiesCost of loans associated with set upCost of utilities - gas, water, electricityCost of hiring fixed salaried staffCost/availability of technologyVariable CostsNearness to marketCost of raw materialsCost of sourcing suppliesTransportation costsBulk increasingBulk reducingNearness to a supply of skilled/unskilled labour
7LocationImage copyright: Joshua Argeliss,Others may depend in some cases on specific locations – in busy city shopping areas, for example – but could have a virtual location through developments in technologySome businesses have little choice where they locate – a coal mine has to be near a source of coal but transporting the coal to where it is needed can be expensive
9Qualitative FactorsFactors that cannot be quantified but which may have a significant impact on the location decisionMay influence the long term outcome of the location decisionNeed to consider impact on and response from stakeholders in the business
11International Location Many qualitative factors will have to be considered in seeking to locate internationallyHow easy is it to get in to the country (for example, locating in China can present many problems, not least of which are the language and cultural barriers that exist)