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Location and Logistics (Type of business (Primary sector- business…
Location and Logistics
Type of market
Greater degree of competition= location decisions likely to be cost related
Type of business
Primary sector- business location decided by location of raw materials
Nature of product- bulky raw materials will require reduced transportation costs
Tertiary sector e.g. gym- location of business decided by where customers are
Costs of labour
Labour intensive business-needs to locate near cheap/plentiful source of labour
High unemployment areas will make labour cheaper
May locate in order to be near skilled areas
Infrastructure
Facilities within an area e.g. transport links, health services
Transport links-important to move raw materials and finished products quickly/easily
Degree of competition
Greater degree of competition-more likely location decisions will be cost based
Usually locate away from competitors
Some actively locate near competition-e.g. "Jewellry Quarter", Birmingham
Location of customers
Markets such as clothing need to be close to customers
Factory might locate near suppliers
International businesses-may relocate to gain new customers e.g. Nissan
Government Incentives
Incentives such as tax breaks- helps businesses to locate in high unemployment areas
Usefulness of incentives used in decision making process.
Planning regulations
Impact on environment and community needs to be considered
Planning permission needs to be applied for
Globalisation
Meant the level of competition has increased
Encouraged businesses to locate where labour is cheap e.g. Eastern Europe