📋 What You'll Learn
The Importance of Location
Why location matters more than you might think, and how it directly impacts profit.
Manufacturing vs Service
Why a factory needs different things than a shop, and what each prioritises.
Local Factors
How proximity to suppliers, customers, workers, and infrastructure influence choices.
International Decisions
Why companies like Apple move production globally, and what they're looking for.
Laws & Government
How rules, planning regulations, and government incentives push businesses in certain directions.
Developed vs Developing
Why some businesses choose LEDCs for cost, others MEDCs for quality and infrastructure.
1️⃣ Why Location Matters More Than You'd Think
What is Location?
Location is simply the site from which a business decides to operate. It sounds simple, but it's one of the most important strategic decisions a business makes—and once it's been made, it's incredibly hard to change.
Key insight: A business in a poor location can fail no matter how good its products or services are. Conversely, a good location can generate profit even if competitors are nearby.
When Do Businesses Need a New Location?
- Setting up for the first time – Choosing where to start is crucial.
- Existing location no longer meets needs – The business has outgrown the space or the area has declined.
- A better site becomes available – Larger car parks, room for expansion, better transport links.
- Expanding internationally – Large companies like Apple and Nike have chosen to set up production facilities across multiple countries.
What Does a Good Location Actually Do?
Good Location = Lower Costs + Higher Sales
Think of location as a multiplier. A good location simultaneously:
- Reduces costs – Less transport, cheaper labour, fewer waste regulations to comply with.
- Increases access to customers – More footfall, easier delivery, closer to your target market.
- Enables access to skilled workers – Larger talent pool, less need to train from scratch.
- Enhances reputation – Locating on a prestigious street (like Fifth Avenue) signals quality.
- Keeps you competitive – You're not at a disadvantage against rivals in better locations.
Real Example
Why Seafood Processing Plants Are Near Ports: A seafood processor needs fresh raw materials quickly. If they locate 500km inland, the fish spoils in transit and costs skyrocket. But if they locate at the docks? Fresh supply, minimal wastage, lower costs, faster turnaround. Same business model, completely different economics.
The Flip Side: A Poor Location Can Kill a Business
Many businesses have failed not because their idea was bad, but because they were in the wrong place. A shop with no footfall, a factory far from suppliers, a tech firm nowhere near universities—these structural disadvantages are nearly impossible to overcome.
2️⃣ Different Types Need Different Things
manufacturing businesses and service businesses prioritise completely different factors
| Factor |
Manufacturing |
Service |