4.4 – Location Decisions

• Location factors for manufacturing business:

  • production methods
  • location of the market
  • raw materials/components
  • external economies of scale
  • availability of labour
  • government influence
  • transport/communications
  • site costs
  • power/water supplies
• Location factors for service sector business:

  • customers' location
  • personal preference of owners
  • technology
  • availability of labour
  • near to other businesses
  • rent/taxes
• Location factors for retailing business:

  • shoppers
  • nearby shops
  • customer parking available
  • suitable premises available
  • rent/taxes
  • delivery vehicles access
  • security
• Locating to a different country:

  • new markets overseas
  • cheaper or new sources of materials
  • labour force requirements
  • rent/taxes
  • government grants
  • trade and tariff barriers
• Legal controls:

  • to encourage business to set up/ expand
  • to discourage businesses from locating in overcrowded areas/ areas of natural beauty or environmental interest