Factors that Influence Location of Business

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Factors that Influence Location of Business
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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?

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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?

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Factors which may influence a businesss 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

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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