Decisions on Location (Edexcel IGCSE Business): Flashcards
Exam code: 4BS1
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Define business location.
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Cards in this collection (32)
Define business location.
Business location is where a business establishes and runs its operations.
Name three factors that affect the choice of business location.
Proximity to the market, labour, materials and competition, the nature of the business, and infrastructure.
Why might a business locate close to its market?
It reduces transport costs and increases accessibility to customers.
Why might a business locate close to its raw materials?
To minimise transport costs — e.g. a brewery near a reliable water source.
Locating where there is a high concentration of skilled workers means locating near the .
Locating where there is a high concentration of skilled workers means locating near the labour.
Why might a business locate near its competitors?
To share a customer base, or to differentiate itself — e.g. a designer retailer in a city's fashion district.
True or False?
A business that sells to other businesses (B2B) usually needs a prominent, high-street location.
False.
B2B businesses are less likely to need prominent locations than B2C businesses that sell to consumers.
Why do many businesses stay in the location where they were first set up?
Out of loyalty to the community, to avoid upheaval, or because of incentives like grants or tax benefits.
True or False?
A remote business must operate from a single physical location.
False.
A remote business may not operate from any single location, using online technologies to link dispersed staff.
What is a B2C business?
A B2C business sells to consumers (rather than to other businesses, which is B2B).
Define e-commerce.
E-commerce is the buying and selling of goods and services online.
How can e-commerce reduce a business's location costs?
It can use smaller premises in lower-profile areas, which are cheaper, as it doesn't rely on foot traffic.
E-commerce lets even small businesses reach customers by selling products online.
E-commerce lets even small businesses reach international customers by selling products online.
Why is proximity to transport infrastructure important for an e-commerce business?
Online orders must be delivered efficiently, so being near highways, rail or logistics partners matters.
True or False?
An e-commerce business depends heavily on high foot traffic at its premises.
False.
E-commerce businesses do not rely on foot traffic, so a high-profile location is less important.
Why does an e-commerce business need reliable IT infrastructure and power?
Remote workers need high-speed broadband, and power outages could stop its online services.
Remote workers in an e-commerce business need access to good communications infrastructure, such as high-speed .
Remote workers in an e-commerce business need access to good communications infrastructure, such as high-speed broadband.
True or False?
E-commerce has grown significantly in recent decades.
True.
E-commerce has grown significantly, making many businesses reconsider their location needs.
What kind of staff might an e-commerce business need?
Experienced call centre and sales staff, plus remote workers with online access.
Define a law.
A law is a rule created by government to regulate the actions of citizens and businesses.
Define regulation.
Regulation is the process of enforcing laws and ensuring businesses abide by them.
How might a government incentivise businesses to locate in a particular area?
By offering grants or reduced tax rates, e.g. in areas of high unemployment or industrial decline.
Why might a business be attracted to locate in a less economically developed country?
Fewer laws and less enforcement mean lower costs, low wages, and less risk of legal action.
Give one thing that attracts businesses to more economically developed countries despite strict laws.
Good infrastructure, highly-skilled workers, and high standards of living.
Name three types of law that affect business location.
Employment law, environmental law, and consumer law.
True or False?
Employment law covers areas such as pay, conditions and equal treatment of workers.
True.
Employment law covers pay and conditions, equal treatment, contracts and trade union rights.
Define a trading bloc.
A trading bloc is a group of countries that agree to reduce or eliminate barriers to trade between them.
Name two examples of trade blocs.
The EU, USMCA (US, Mexico, Canada), and ASEAN.
Define a free trade area.
A free trade area is a bloc where members abolish trade restrictions between themselves but keep their own restrictions with other countries.
Businesses may locate in a trade bloc country to avoid paying or other restrictions such as quotas.
Businesses may locate in a trade bloc country to avoid paying tariffs or other restrictions such as quotas.
True or False?
The Eurozone is an example of low economic integration between countries.
False.
The Eurozone is a monetary union — a high level of economic integration; a bilateral agreement is low.
Why might a business locate its operations inside a trade bloc?
To avoid tariffs or quotas that would apply to businesses outside the bloc.
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