decisions on locations

• main factors influencing location decisions and relocation of a business

  • proximity to:
  • -market
  • -labour
  • -materials
  • -competitors
  • nature of the business activity
  • impact of the internet on location decisions
  • legal controls and trade blocs
• proximity to market

  • more important for businesses like:
  • corner shops
  • salons
  • grocery stores
  • a business needs to be close to it's market
  • if customers from the target market cannot access a business it would lose out on sales
• proximity to labour


  businesses consider relocating to countries where wage rates are very cheap

  if a firm needs a particular type of skilled labour, certain locations may be more suitable than others

  being closer to skilled labour can save money on training, earning you more profit

  it is important to consider the cost of labour as well as the quality of labour
• proximity to raw materials (inputs used to produce goods)


  businesses that use larger amounts of raw materials that are difficult to transport may choose to locate closer to their sources

  they choose to transport the final product to the market instead

  businesses also look to minimize land and property costs
• proximity to competitors: the closer a business is to its competitors, the more likely it is to be affected by them


  the distance between a business and their competitors depends on what the business provides (what type of goods/services)

  most businesses locate near their competitors if they're not well known

  on the other hand, well known businesses try keeping distances from their competitors as it can ruin and lower their reputation for example a high end restaurant wouldn't be present in a mall food court