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Factors Affecting the Location of an industry - Coggle Diagram
Factors Affecting the Location of an industry
Physical factors
Weather / climate
Will you be able to make products in rain / heat waves / droughts?
Example : If you have a mango farm you may prefer to farm in a wet country like Indonesia.
Raw materials
Are sufficient raw material available?
Is the supply of raw materials reliable?
Example : If you own an oil company, building next to an oil rig may not be very wise because oil is a finite resource. This means that it will eventually run out. + You may discover larger oil rigs elsewhere.
Power
If you get your power supply from raw materials, will they be available?
Example : You make trains and get your power supply from burning coal. Is there a reliable source of coal nearby?
Site requirement
Is the land cheap?
Example : Land of high relief tends to be cheaper because it's harder to build on. Will this affect your business?
Natural Routes
Is there a natural route that provides speedy and cheap transport?
Example : You may build your business next to a port to reduce the shipping fees. (As it may be cheaper to transport your product on water not land) eg. transporting Yachts on cargo ships
Human factors
Land price
Entrepreneurs will prefer to buy cheap land.
Power
Is the electricity and fuel cheap in the area?
Example : If I have 50 machines to make products I'd want to pick an area with cheap electricity bills because machinery often requires a lot of energy.
Labour
You'd want a large and cheap supply of labour (must be close to labour to avoid transport cost of people)
Example : Building a compound next to the school to house the teachers in order to avoid transportation costs
Transport
People want to locate close to main roads and avoid remote areas so transport fees of the product and people aren't expensive.
Market
You would want to be close to the market so customers can reach your services easily.
Gov aid / grants
Will reduce the costs.
Example : If the government begins to pay people to build in a remote area, it'll lower your costs. (Maybe not transport costs tho)
Interntet & Telecomunication
People would want their industry to be connected not just on land but online too.
Example : If you have a business in antarctica the shipping price to get some building materials will be very expensive
industrial linkage
Are there industries in the area you can benefit from?
Example : If I have a bakery and there's a farm which produces flour down the road this'll help me as it'll allow me to buy flour fast and easily. (+ If your a frequent buyer you may get discounts)
Capital
Cheap capital in that area will encourage the industry.
Example : A farmer may choose to build somewhere where he can rent a tractor seasonally for cheap
Gov policies
Does the Government want you to develop your business. If so you will probably receive grants = lowering your costs.
Are there building restrictions in an area to "protect wildlife". If so you'd prefer to build elsewhere to avoid government and public pressure.
History
Some industries may prefer not to build on a battlefield due to its historical significance.
