5.4 Location has reasons!
location: geographical position of business
- cost and availability of land.
- i.e. higher rent in central business districts
- Cost and availability of labour
- cheaper to operate overseas or in rural areas
- proximity to market
- you want to be located near your customers
- gains competitive advantage - less transport costs and greater convenience for customers
- local infrastructure
- physical + organizational structures needed for society to function
- highways, waste, water, wifi
- government incentives
- these cut production costs
- clustering
- i.e. coffee shops in malls
- bulk gaining industry
- bottled water is heavy. Assemble and ship it closer to companies. products weigh more after production. final product is heavier than the raw materials to make it. home furniture
- bulk reducing: products that weigh less after production. mining. costs more to transport heavy resources. manufacturing plants near raw material.
- cost of living.
INDUSTRIAL INERTIA: too lazy to relocate even though there is less cost somewhere else. this may be done because it would upset the workforce, or they can’t adapt/relocate to a new location.
