Topic 5 - Place. N5 Business Management

Transcription

1 Topic 5 - Place N5 Business Management 1

2 Learning Intentions / Success Criteria Learning Intentions Place Success Criteria By end of this lesson you will be able to describe how: how the competition in an area influences business location how the availability of resources in an area influences location how the costs of premises in an area influences location how government incentives can influence location factors which influence the method of distribution for products. 2

3 Business Location Businesses have to decide where to locate - this means, where have their shop or where to sell their product. A number of things have to be considered when deciding where to locate. 3

4 Factors Determining Location Near customers Availability of suitable premises Parking facilities Suitable infrastructure Government incentives and grants The market segment Employee availability Competition Environmental impact 4

5 Near Customers There is no point in setting up a business in a place where there are no customers. Market research will help to identify where customers exist and where the business could locate to meet the needs of these customers. 5

6 Availability of Suitable Premises The business might need a certain size of shop or a shop with certain facilities (e.g. a kitchen or large car park). There might only be premises available in certain places. 6

7 Parking Facilities Customers need to be able to access the business easily or they might be put off from using the business. It is also important that the business has disabled car parking facilities available. 7

8 Suitable Infrastructure Infrastructure refers to the availability of water, gas, electricity and transport links. This is important so that the business can operate (it wouldn t get very far without electricity!) and so that customers, suppliers and other stakeholders can access it. 8

9 Government Incentives and Grants Sometimes the government will offer incentives (usually a sum of money that doesn t need to be repaid) to encourage businesses to set-up in a specific location or area. 9

10 The Market Segment Depending on the customer group being targeted, this might influence where the business locates. For example, a shop selling clothing for skiers might open up next to a ski slope. 10

11 Employee Availability Employees might be needed to work in the business and therefore employees with suitable skills need to be available nearby. 11

12 Competition A business might want to set up as far away as possible from its competition or it might want to be as close as possible to try and increase their market share.. 12

13 Environmental Impact Businesses have to consider the environment when deciding on a location. They need to make sure that they are socially responsible when undertaking any construction work and setting up.. 13

14 Distribution Methods A business has to decide how to physically get the product to the customer. This is of course, assuming that the product is a tangible good. Some products might be provided electronically via the internet. The four main methods of distribution are: road network train aircraft boat. 14

15 Road Network Advantages Often cheaper than other methods. Delivery is often quick. Customer receives the product direct to their door. Disadvantages It is difficult to transport large products. Not as environmentally friendly as other methods. Road works might cause delays. 15

16 Train Advantages Large products can be transported. Large quantities can be transported. Disadvantages There isn t a train station in every location or even a rail line. Not a door-to-door service. 16

17 Aircraft Advantages Products can be transported across the world more quickly than by sea. Large amounts of small products can be transported. Disadvantages Large items cannot be transported. Products need to be taken to an airport to be loaded onto the aircraft - this could be expensive. Not a door-to-door service. 17

18 Boat Advantages Larger products can be transported. Products can be transported across the world. Disadvantages It is time consuming to transport products across the world. Not a door-to-door service. 18