BUSINESS MANAGEMENT

1
BUSINESS MANAGEMENT

• 3.1 Why do Businesses Locate where they do?
• Business Location

2
What Influences Location?

• Raw Materials (eg pulp mill near forest)
• Labour (electronics firm locates where there are
  skilled workers)
• Proximity to market (for selling goods)
• Infrastructure (eg roads/railways to allow
  transport of goods)
• Cost of land, premises (eg out of town is
  cheaper)
• Competition (eg lots of shoe shops together)
• Central and Local Government Assistance
  (financial help for firms locating in particular
  areas)
• Costs of Labour (eg cheaper labourforce in
  developing parts of the world like India)

3
Braehead Shopping Centre

• Why is Braehead where it is?

4
(No Transcript)
5

• Disneyland, Paris
• Opened in 1992
• An estimated 17 million people could drive there
  within 2 hours
• 300 million could fly there within a few hours

6
Government Assistance

• Both the Scottish Government and the UK
  Government provide assistance to businesses
• Local Government also helps

7
Regional Selective Assistance(Scottish
Enterprise)
Click for website

• RSA encourages businesses to undertake investment
  that will directly result in the creation or
  safeguarding of jobs in Scotland. Both indigenous
  (Scottish) and foreign companies can apply
  helping to ensure Scotlands economy remains
  globally competitive.
• There are a number of criteria to be met for an
  application to be successful. The amount offered
  is dependant on the size of your business,
  location of the project and our assessment of how
  much is needed for the project go ahead.

8
To qualify for RSA grants, companies must be
located in Assisted Areas (EU) usually areas of
high unemployment
9
Assisted Areas
10
Click for Website
Scotland attracts investment from leading global
companies looking for the ideal destination for
business investment and a premier location for
research and development.
11
Enterprise Zones(Decided by Central Government)

• A new generation of Enterprise Zones (EZs) are
  expected to be launched in the latest bid to
  revive the economy. The would provide big breaks
  on tax and business rates

12
Local Government can also help ..

• Advertise on the internet
• Give detailed information to businesses about
  getting grants and aid
• Give information to businesses about local sites
  and premises
• Provide grants for starting up in their area
• Provide grants for research and development

13
BUSINESS MANAGEMENT

• 3.1 Why do Businesses Locate where they do?
• Locating Internationally

14
The European Union 27 member states
15
What is the Single Market

• The EU provides one market of over 320 million
  potential customers.
• Advantages include
• There are no limits to the number of goods they
  can sell in member countries
• There are no customs duties between member
  countries
• There is a larger choice of suppliers
• Competition will increase which should increase
  efficiency
• Free movement of workers between countries

16
The Single Market

• Disadvantages include
• Language barriers can cause communication
  problems
• Distance problems add to the sales cost
• Currency difficulties overcome in some
  countries by the introduction of the euro ()

17
The Single Market
Who Benefits? Consumers Lower prices, greater
choice of goods and services, work within
EU Businesses fair competition, economies of
scale, expand to global markets
18
Single Currency the Euro

• One single common currency used throughout the EU
  states introduced in January 2002.
• Not all countries have joined the single
  currency.
• Removes barriers to free movement of capital.
• European Central Bank - fixes interest rates
• Cheaper exchange/transaction costs.
• Transparency of pricing allows easier comparisons
  to be made.

19
Globalisation

• This has created a single world wide market place
  which is dominated by multi-national businesses
• Globalisation is possible because of
• Developments in ICT satellite,
• cable, mobile phones, www
• Developments in transportation
  containerisation, infrastructure for roads, rail,
  air
• Decline in barriers to trade

20
Multi-Nationals

• Multi-nationals operate overseas
• generally in a range of products. Often
• their size is a result of takeovers and
• mergers of businesses in other countries.
• This allows
• Use of the same brand name worldwide
• Using the same advertising
• Using the same procedures/practices
• Operating in a number of countries allows
  multi-nationals to
• Reduce the cost of transporting the goods
  overseas
• Switch production from plant to plant and country
  to country when profit levels change
• Move into production where cheap labour and
  materials are available
• Locate where tax advantages can be gained

21
Advantages of Globalisation

• Vast market of consumers
• Reduction in some trade and cultural barriers
• Locate where costs are lowest
• Greater choice for consumer
• Communications easy
• Better awareness of how to deal with businesses
  and customers
• Better choice of resources

22
Disadvantages of Globalisation

• Language barriers, cultural differences,
  different time zones, technology failures can
  lead to communication problems
• Different tax laws in different countries
• Currency differences

23
ICT in Globalisation

• ICT allows information to be transmitted quickly
• Relocation of staff not necessary interact with
  other staff using technology

24
(No Transcript)
25
(No Transcript)
26
Suggest Sources of Finance
SITUATION SOURCES OF FINANCE
Sammy of Oban wants to buy an ice-cream van Bank Loan Personal savings
ABC plc want to build a new factory in Inverness RSA Issue shares
Argyll and Bute council want to provide new cars for their senior staff Car leasing scheme?