The Importance of Business Location (Edexcel IGCSE Business)

Proximity to the market

• Distance between the business location and the target market
  
  
• Locating near the market reduces transportation costs and increases accessibility to potential customers

• A luxury car dealership may locate its showroom in a wealthy city suburb

Proximity to labour

• Availability of qualified and skilled workers in the area
  
  
• Locating where there is a high concentration of skilled labour gives access to the necessary workforce to run business operations efficiently

• A high-tech manufacturer may locate in a region where similar firms already operate to access workers with relevant skills

Proximity to materials

• Availability of raw materials and supplies needed for the business
  
  
• Locating close to key resources helps minimise transportation costs

• A brewery may be located close to a reliable water source to ensure a continuous, high-quality supply of a key ingredient

Proximity to competition

• Take advantage of a shared customer base or differentiate the business by offering unique products or services

• A designer clothing retailer may be located in the fashion district of a major city

Nature of business activity

• Businesses have varying space, infrastructure and accessibility needs
  
  
• Businesses that sell products to other businesses (B2B) are less likely to need prominent locations, e.g. in shopping malls, than businesses that sell to consumers (B2C)

• A factory may require a large space for equipment and a loading dock for shipping and receiving goods

Infrastructure

• Location close to major road or rail networks allows businesses to receive supplies and distribute products
  
  
• Good transport links are attractive to potential employees

• A law firm may require central office locations with good access to public transport