Please enable JavaScript.
Coggle requires JavaScript to display documents.
Business Mindmap - Coggle Diagram
Business Mindmap
Factors effecting the location
production methods and location decisions
job production
small scale
nearness of components less important
flow production
large scale
component supplier is more importatt
large number of components need to be transported
high cost
market
weight and transport cost
as an example drinks can be heavier when there's the drink inside
empty bottles would be cheater
the product may perish quickly
transport links are improved and preservatives make food last longer, so the importance of this is reduced
raw material/ component
source of material sometimes are heavier then the finished product
as an example ore processing factories are located near the mining site so they don't have to transport the ores long distances
locating near to component suppliers to save transportation cost
if the raw material perishes quickly, then locating near it is important or there will be a lot of waste if it spoils
availability of labour
manufacturing needs labour
if unskilled labour required they might want to locate where there's a high unemployment rate
if skilled labour is needed it might be cheaper to locate where a lot of these people lived
basically choosing and area with low wage rates
government influence
positive
state funded grants
giving more money to people in the area to encourage them to move there
negative
regulations and restrictions
refusing a business permission to set up
Ex: a business who produce harmful waste
Transport and communication
nearby transport system near to speed up time taken on delivery and reduce costs
power and water supply
reliable source of power (no power cuts)
for companies that need large supplies of water, they might locate near a sea or or river
climate
Ex: a scuba diving business needs to set up in a nice and hot beach
Ex: Silicon Valley in the USA has a dry climate that helps the production of silicon chips
Factors affecting the location of retailing businesses
shoppers
setting up in a popular area
type if shoppers an area attract is also important
Ex: expensive goods would locate in a high income place
Ex: small gift types would locate in an area visited by tourists
nearby shops
locating near a place people visit regularly would mean a lot of potential consumers pass by the shop
there might competitors nearby
negative
business will have to compete for customers
positive
Ex: a business selling clothes might locate in a place with other clothes shop, because it encourages customers to go there due to a range choice
if the business is in a place with not other cloth chop costumers might not go there due to lack of option
customer parking
a convenient parking area near the shop encourages costumers to visit the area
rent/taxes
The more central, the higher the tax
high popularity, high demand, high price
low popularity, low demand, low rent
access for delivery vehicles
something to take into consideration because sometimes some premises makes it hard for them to access
security
some areas have a lot of thieves that might steal from the business
although their rent is lower, insurance companies will likely not want to insure the business
a high security place might be more expensive but could be preferred
legislation
some places might restrict marketing of certain goods in that area
availability of suitable vacant premises
if there are none available for purchase or rent, business may not be able to locate there
Factors affecting the location of a service sector business
customers
direct contact is required
quick response time
ex: plumbers and electricians
personal preference of the owner
owners can influence the business to be closer to where they live
technology
ability to locate anywhere due to service being conducted via telephone or other means
company take advantage of this and locate on the out skirts to take advantage of rent
company can locate abroad
availability of labour
large number of employees means no remote area (large town/city)
skilled labour required means business moves to a location that provides that type of work/ employees move near the business
climate
tourism
Ex: hotels locaring where the climate is good and near to a beach
near to other businesses
normally for larger services
Ex: firms that service equipment in large companies
Ex: banks located in busy area for customer's conveniency
Rent/ taxes
if not needed, business will locate in the outskirts of town because rent is cheaper there
Factors a business could consider when deciding in which country to locate operations
new market overseas
when there's a steady increase in sales overseas, the business might wanna relocate nearer there instead of transporting the products
locating near to costumers like Starbucks or Hilton hotels
cheaper or new sources of materials
raw material source can run out, so the business either brings it from somewhere else or move to new site where it can get it more easily
especially for mineral sources like oil wells
might be cheaper to locate there rather then transport all the material
difficulties with the labour force and wage costs
unskilled workers
labour intensive business especially sometimes decide its more profitable to relocate overseas
business located in developed country might move to developing countries
some business are in a country where costs keep rising
skilled labour
country where they can find the labour
Ex: business trying to employ a large IT staff moving to India, because it has a lot of IT related university degree students
Rent/taxes considerations
if rent keeps on increasing the business might relocate somewhere it's cheaper
Availability of government grant and other incentives
Government sometimes encourage foreign countries to bring in investment and job oppurtunities
advantages
grants
lower taxes
they do this because it'll provide jobs and perhaps tech new skills and import tech to their country
trade and tariff barriers
sometimes business locate in a country to avoid another country's policies such as
tariffs (tax on imported goods)
quotas (limit placed on quantity of imports of a certain good)
Role of legal controls on location decisions
why does government try to influence the decision
to help with high unemployment rates and better developing areas
stopping businesses from setting up in ovr4crowded areas or scenic sites
measures government take
planning regulations legally
restricting certain business activities
some buildings may be rejected permission
Ex: in some beautiful areas no businesses other than farming is allowed
government grants or subsidies
financial grants
low rents
typically in places with a high unemployment rate
the location is very important as it can greatly affect profitability, so businesses want to locate their firms in the best area possible
Location of industry
considered when a business is setting up or moving
environment and business's objectives change
change from survival to expansion or increasing profits