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Factors that Influence Location of Business

Factors that Influence Location of Business

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Factors that Influence Location of Business

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  1. Factors that Influence Location of Business

  2. Starter questions • Think about which businesses are located near to where you live or go to school. • Do you think that where a business chooses to locate can have a massive impact on its success? • Why do large supermarkets situate next to major roads? • Why are travel agents often found on busy high streets? • Why is WDP located in Bristol?

  3. Pair Activity Question Many people take the locations of businesses for granted, but to the people that own them their locations are very important and can depend on a number of factors. • List what you think these factors might be?

  4. Factors which may influence a business’s choice of location include: • Close to customers • Availability of skilled labour • Transport links for suppliers and distribution • Demographic change • Financial help available from the government • History and tradition • Wage levels

  5. Close to Customers • These businesses depend on customers passing through their doors and spending money. Locating near their customer base increases their chances of making sales.

  6. Availability and Cost of Skilled Labour • The cost of labour varies in different parts of the UK, because of levels of unemployment and differences in living costs. Wages in London are usually higher than in the rest of the UK. • Businesses need people to work for them. Consequently, businesses often set up in populated areas.

  7. Transport Links for Suppliers and Distribution • Most businesses need to be easily accessible to their suppliers and distributors. • Businesses that distribute their products within the UK or overseas will have to think about access to the transport infrastructure.

  8. Demographic Change • This is the increase or decrease in the population of an area over a period of time. Businesses can be attracted to set-up in an area where demographics have changed.

  9. Financial help available from the government • The government can give grants, tax relief and subsidies to businesses that set-up in areas of high unemployment. The aim is to try and create new jobs. Benefits: These incentives can drastically cut a business costs.

  10. History and tradition • Sometimes businesses will locate in a certain area because there is a history of that type of business in the area. Benefits of this will be: - People in the area have the skills that are needed. - Local colleges provide special training for the type of work required.

  11. Wage levels • The average wage offered by businesses varies in different parts of the UK. • So business need to think about the wage or salary that people in that area will expect as this can raise their costs.

  12. student activity • Identify what would be the main factors of that might influence a change in location for WDP. • Under each factor identified within the spider diagram say why each factor is important WDP