Proximity to Market

Businesses often prefer to be located near their target customers in order to reduce transportation costs and improve accessibility. This leads to better customer service and possibly higher sales.

Proximity to Labour

Businesses may relocate to areas with skilled or more affordable labour in order to decrease costs as well as improve productivity and the quality of goods being produced.

Proximity to Materials

Being close to raw materials reduces transportation costs and ensures timely production.

Proximity to Competitors

Businesses might be located near competitors as they operate in the same market, therefore sharing the same customers or avoid areas high with competition.

Nature of the Business Activity

The type of business significantly influences location. This is because different businesses have different requirements regarding the quality of nearby infrastructure and proximity to market, labour and manufacturers.

Impact of the Internet on Location Decisions

E-commerce: Online businesses may be seen as cost-effective due to their increased flexibility. This means they do not have to take barriers such as crowding or traffic into account, therefore potentially having higher sales.

The main benefits of e-commerce and m-commerce are:

• lower costs

• flexible working hours

• access to a larger market of potential customers

• ability to be open 24 hours a day, seven days a week

• relatively low-price marketing and promotion

Fixed Premises: Brick-and-mortar businesses must consider factors like foot traffic, visibility, and accessibility when choosing their location in order to ensure the location is accessible for employees and customers.

Legal Controls and Trade Blocs

Local regulations, zoning laws, environmental restrictions, and tax can affect location decisions. This includes trade blocs that can encourage businesses to locate within certain regions to benefit from advantages such as tariff-free.