Why is the availability of labour a location factor?

A business needs enough workers with the right skills nearby. Areas with skilled workers or lower wages can attract businesses.

How does competition affect the location of a business?

Some businesses avoid areas with many rivals to win more customers. Others choose to cluster together, such as restaurants in a city centre, to attract passing trade.

How do costs affect the location decision?

Rent, rates and wages vary greatly between areas. A business will usually choose a location it can afford that still meets its needs.

AQA GCSE Business 8132

Business in the Real World

Topic overview What a business is and why people start one Goods, services, needs, wants and factors of production Business sectors, entrepreneurs and a changing business environment Sole traders, partnerships, limited companies and not-for-profit organisations Business aims and objectives Why business objectives differ and change Stakeholders and their influence on businesses Factors affecting business location Business planning and basic financial terms Expanding a business and economies of scale

Influences on Business

Topic overview E-commerce and digital communication Ethics, the environment and sustainability Interest rates, employment and consumer spending Globalisation and exchange rates Employment, health and safety and consumer law Competition, risk and uncertainty

Business Operations

Topic overview Job, flow and lean production Managing stock: just in time and just in case Suppliers, procurement, logistics and supply chains Quality control, quality assurance and TQM Customer service and the sales process

Human Resources

Topic overview Organisational structures, span of control and delegation Recruitment, selection and contracts of employment Financial and non-financial methods of motivation Induction, on-the-job and off-the-job training

Marketing

Topic overview Identifying and satisfying customer needs Market segmentation Purpose of market research and primary and secondary research Market research methods and interpreting findings Pricing methods and factors affecting price New products, USP, brand image and the Boston Matrix Product life cycle and extension strategies Promotional methods and the promotional mix Channels of distribution, e-commerce and m-commerce The integrated marketing mix

Finance

Topic overview Sources of finance Cash flow and cash flow forecasts Financial calculations and average rate of return Break-even charts and margin of safety Income statements and statements of financial position Profit margins and judging financial performance

Business in the Real World

Factors affecting business location

3 things to know
Both papers

Overview

Nearness to the market and to raw materials, the supply of labour, competition and costs, why online businesses have more freedom, and how a firm weighs one location factor against another.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Key term

Why is the location decision important for a business?

Key term

Why might a business locate close to its market?

Key term

Why might a business locate close to its raw materials?

Questions from this subtopic

Each one with the model answer underneath.

1
Why is the location decision important for a business?
Model answer
Location affects a business's costs and its access to customers, staff and supplies. A poor location can lead to low sales or high costs.
2
Why might a business locate close to its market?
Model answer
A location near customers makes buying easy and cuts delivery costs. Shops and services such as hairdressers need to be close to customers.
3
Why might a business locate close to its raw materials?
Model answer
A site near raw materials cuts transport costs, especially for heavy or bulky materials. A quarry or steelworks is an example.
4
Why is the availability of labour a location factor?
Model answer
A business needs enough workers with the right skills nearby. Areas with skilled workers or lower wages can attract businesses.
5
How does competition affect the location of a business?
Model answer
Some businesses avoid areas with many rivals to win more customers. Others choose to cluster together, such as restaurants in a city centre, to attract passing trade.
6
How do costs affect the location decision?
Model answer
Rent, rates and wages vary greatly between areas. A business will usually choose a location it can afford that still meets its needs.

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Business in the Real World

Influences on Business

Business Operations

Human Resources

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The pays a fee and a share of revenue.

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Wage means pay based on the number of hours worked.

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