Location (AQA A Level Business): Flashcards
Exam code: 7132
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- FrontChoosing a Location
Define business location.
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Cards in this collection (14)
Define business location.
Business location is where a business establishes and runs its operations.
Why is location one of the most difficult-to-reverse operational decisions?
Relocating once a business is established is expensive and disruptive. The wrong location can therefore damage long-term competitiveness.
True or False?
A prime city-centre site is always the best choice for a retailer because it attracts more customers.
False.
The higher cost of a prime location must be weighed against the potential revenue it generates through greater customer footfall.
Define business rates.
Business rates are local authority taxes on commercial property, which vary by location and can be a significant fixed cost.
Locating near complementary or competing businesses to attract shared customer traffic is known as ___________.
Locating near complementary or competing businesses to attract shared customer traffic is known as agglomeration.
Why do manufacturing businesses often locate near their suppliers?
Locating near suppliers reduces transport costs and lead times for raw materials and components.
Define infrastructure.
Infrastructure refers to the physical and digital systems that support business operations, such as roads, rail, ports, airports, broadband and energy supply.
True or False?
Government grants given to businesses that create jobs in target areas do not need to be repaid.
True.
Grants are direct financial awards to businesses that create jobs in target areas. Unlike a loan, they do not need to be repaid.
What benefits do businesses receive in Enterprise Zones and Freeports?
Businesses in these designated areas receive tax breaks, simplified planning permission and reduced customs duties.
Why is it risky to locate production in a country with lower environmental standards to avoid compliance costs?
This raises significant ethical concerns and creates reputational risk for the business.
Shorter supply chains typically mean lower transport emissions, which reduces a business's ______________.
Shorter supply chains typically mean lower transport emissions, which reduces a business's carbon footprint.
How does a city-centre location usually affect a business's break-even point?
Its higher fixed costs, such as rent and rates, usually give it a higher break-even point. However, greater footfall may generate higher revenue.
Define return on investment (ROI).
Return on investment (ROI) measures the financial return generated by a location decision relative to its cost, expressed as a percentage.
Return on investment = Profit from the investment ÷ Cost of the investment × 100
True or False?
The time horizon of a location investment does not matter when analysing its ROI.
False.
Some locations take longer to generate returns, particularly where the business is entering a new market or building brand awareness from scratch.
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