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Location Decisions - Coggle Diagram
Location Decisions
Manufacturing business :
Market: Now a days is not important to locate a factory near a market due to the improvement in transport and routes.
Raw material: Raw material is more expensive to transport than the finish product. This is why it is more convenient to locate ore-procesing factories near to the mining site.
External economies of scale : It's convenient to locate the business near firms that could support it. This will make the business be more effective
Availability of labour: If particular skilled labour is needed, it will be convenient for the business to settle in the areas where they are located.
Government influence: Governments may encourage business to locate in particular areas by offering they grants. For example, some governments may give money to businesses to locate in areas of high unemployment, while others may prefer for all of them to stay in a specific area to regulate contamination.
Transport and communications: It mis suitable for businesses to locate near to transport systems to reduce costs in delivery.
Power and water supply: Even though power and water supply are available in most places, in some areas they are not so reliable. So it is better for businesses which need this supplies to settle in places with reliable sources.
Climate: For some businesses it may be beneficial to locate theirselves in places with a specific climate.
Retailing business
Rent/Taxes: Popular areas have more expensive rents and taxes than less popular ones, so a business will have to take into account its budget when deciding where to settle
Access for delivery vehicles: Depending on the type of retailing business, delivery vehicles might be needed and the location should have access to them
Availability of suitable vacant premises: Its possible that in some areas there are not shops for sale, so the business will not be able to settle there
Customer Parking: Its very important for a business to settle in an area where there is parking because its more probable that potential customers will visit
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Nearby shops: It is convenient for some retailing businesses to locate near other businesses so, when potential customers are in the area they might visit the shop
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Shoppers: The type of area where a retailing business settles is important for the business to attract more customers. For example, it will be more suitable for a gift shop to locate the business in an area visited by tourists.
Service sector business
Climate: One factor when deciding where to locate your service center is climate, specially if ir is related to tourism
Availability of labour: Businesses have to take into account the amount and type of employees when deciding where to locate the service center. If they need a large number of employees, its not convenient for them to locate in remote areas
Technology: Depending on the type of service, with new technology businesses are able of locating their companies anywhere they want
Near to other businesses: Services that serve other businesses will need to locate themselves near them to be more efficient, such as caterings working in hotels.
Customers: Sometimes, comes businesses need to be near their clients to provide certain services,usually when they are of direct contact (ex: gardeners)
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Personal preferences of the owners: Owners may decide where to locate their businesses depending on their personal interests, mainly near from where they live.
Abroad
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New markets overseas: it is better for busineses to be located close to the market sector, so if the business is in a industrial sector, it will be convenient to relocate
Difficulties with the labour force and wage costs: the location of the business may have high wage costs , or maybe the labour needed is not easily found in the site so moving is a good idea
Availability of government grants and other incentives: governments may give benefits to busineses in order for them to locate on their countries in order to increase jobs and income
Cheaper or new sources of material: in case raw material runs out, a business can use alternative supplies or move to a new place to obtain these supplies easily
Trade and tariff barriers: If there are trade barriers like tariffs then by locating in that country there will be no restrictions