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CHAPTER 21 - Coggle Diagram
CHAPTER 21
Factors affecting the location of a manufacturing business
Availability of labour
To be able to manufacture products at least some labour will be necessary, if particular skilled labour is needed, it may easier and cheaper to recruit these employees if the business sets up in an area where people with the relevant skills live or an area where there is high employment may be more suitable
Government influence
the government might give money to businesses which locate in the area has high unemployment. However, the government influence might be negative in that there might be regulations or restrictions on what business can do
Transport and communications
Businesses usually need to be near to a transport system like road, rail, port or airport where the product is for export, the ability to easily get to a port will be important
Power and water supply
if the business are locate in a place where some industries having a reliable source of power, and therefore no regular power cut, may be essential same at water, if large supplies of water are need as part of the manufacturing process, it will be very importance
Climate
climate will not influence most manufacturing businesses but occasionally climate might be important. For example like selling ice cream in a cold climate may not get much profit compare to sell it in a hot climate
Production methods and location decisions
If job production is used->small business->nearness to components doesn't matter so much
If flow production is used on a large scale->Needs to be close to suppliers
Market
Today's improve transport link has reduce the need for being near to market
If the product perishes quickly->needs to be close to maket
External economies of scale
Support businesses
Research department
Raw material/Component
Raw material needs to be processed quickly
Heavy raw material
Many components needed
Factors of affecting the location of service sector business
Customers
Convenience for the customers to use
Need direct contact between the business and customers
Plumbers, electricians
Hairdressers, beauticians, caterers, restaurants, cafes, gardeners
DON'T NEED TO BE NEAR TO CUSTOMERS
NEED TO BE NEAR TO THE CUSTOMERS
Direct personal contact is not necessary
Can use telephone, post or internet
More and more firms are becoming free from the need to locate near to their customers
Increasing use of IT and the internet
Availability of labour:
Businesses that require large number of employees can't be placed in remote areas.
It will need to be located near a large town or city
Personal preference of the owners
Locate their business near to where they live
Climate:
Climate will affect some businesses, particularly if they are linked to tourism in some way. Hotels often need to locate themselves where the climate is good or near to a beach
Near other businesses:
Some services serve the needs of large businesses, such as companies that servive equipment found in large businesses.
They will need to be nearby to respond quickly to a call to repair the equipment
Rent/taxes:
If the service doesn't need to be on the main streets in a town or city center, for example, doctors, lawyers,.... then the business will locate on the outskirts of town to benefit from lowet rents and taxes
Technology
Allowed some services to locate away from their customers
Website designers
Can locate anywhere, choose to locate on the outskirts of cities or remote areas
Take advantage of cheaper rent