1. Business Location
AS Business Studies

2. Aims and Objectives Aim:
Understand the factors influencing location decisions.
Objectives:
Explain demand and supply factors
Analyse the benefits of choosing the right business location.
Evaluate what the success of location decisions may depend on.

3. Why is a businesses location important?
Starter
Why is a businesses location important?

4. Why Location Matters Choice of location has a direct effect on costs.
Location also potentially affects ability to generate sales and deliver customer service.
A poor choice of location is costly to change.

5. What factors would affect a businesses’ location decision?
Location Factors
What factors would affect a businesses’ location decision?

6. Three Key Location Factors
Costs of The Operation
Desired Customer Service Level
Potential Revenues
Supply Factors
These are mainly concerned with the operating costs of the location.
Demand Factors
These factors mainly affect customer service and revenues.

7. Location Supply Factors
Labour Costs
Land and Building Costs
Energy Costs
Transport Costs

8. Location Demand Factors
Customer Convenience
Labour Skills
Site Suitability
Image
Expansion Potential

9. Qualitative and Quantitative
Qualitative Factors
Image
Tradition
Personal preferences
Quantitative Factors
Costs
Customers
Size of market
Suppliers

10. Benefits of Good Location
In groups decide on the benefits of a good business location.

11. Benefits of Good Location
Optimal revenue opportunities – customer service is not inconvenienced through a choice of location.
An acceptable rate of return on investment – all business projects compete for uses of cash, business location is no different.
Access to labour force – which enables the business to achieve the objectives of the firm through production and raising revenues.

12. What costs may be involved in the relocation of a business?
Costs of Relocating
What costs may be involved in the relocation of a business?

13. Costs of Relocation Recruiting and training staff in the new location.
Duplicated property costs – e.g. remaining period on the original lease + upfront payments on new lease.
Costs of physical transfer – moving of assets and stocks.

14. Multi Site Locations
Multi-Site: where a business operates from more than one location.

15. Examples of Multi-Site Businesses

16. Examples of Multi-Site Growth
Retailer expands by launching the same format in other locations nearby and then across the UK.
Manufacturer establishes regional distribution centres.
Franchisor expands by selling geographical territories to franchisees.
UK bank opens a call centre operation overseas.

17. Examples of Multi-Site Growth

18. Examples of Multi-Site Retrenchment

19. Depends on…. What does the success of locating successfully depend on?
Target market is right?
Research conducted into location
Costs of the location being manageable

20. January 2011
Plan your answer first using the planning sheet