Location Elements

• Integration with business

  Choose to locate close to other factories

  OR

  Business units that all work towards satisfying the same customer needs

  -> car manufactures are surrounded by manufactures of car parts

  Being close to each other allows for easy transportation and access to components to assemble the final product
• Proximity to the resources vs market

  1. Closer to resources for perishable goods to be processed and then sent to market as finished goods
  2. e.g tomatoes from farm to factory and then tomato soup is sent to market
  3. Closer to market for semi-finished goods to be sent to final production closer to market
  4. e.g wood is processed and sent to factory close to market because it is easier to transport wood than furniture
• Availability of labour and skills

  Factory location should be close to an area where there is already a concentration of the required skills to attract labour with the correct skills

  * although not always possible because of need for resources e.g a mine
• Availability of resources

  Location factory close to services such as infrastructure

  * e.g water, electricity, communication networks, and waste disposal
• Availability of transport

  Consider type of transport system required to send and receive goods and services

  Consider locating close to appropriate transport network

  *e.g existing roads, airports, railway systems, harbours/pipelines
• Room for expansion

  Consider the possibility to expand in the future, location needs to accommodate expansion
• Special grants

  Government might offer special grants as away to attract industries to certain locations to stimulate economic growth

  Business would only consider such a location if the other elements discussed are also available in those area
• Site costs

  Consider the cost implications of setting up in a particular area (cost to, level ground, lay pipeline, rates ad taxes)
• Regional regulations

  Important to check that location has no previous violations or that it has no historical land claims