Business location — AQA GCSE Business
Test yourself on Business location with AQA GCSE practice questions.
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Business location explained
Location decisions are influenced by a range of factors that affect costs, revenue and competitiveness.
Read the full explanation
Proximity to raw materials reduces transport costs for manufacturers, while proximity to the market is vital for retailers and service businesses. Labour availability and cost, including skills and wage rates, influence where businesses set up. Infrastructure such as transport links, broadband and utilities affects efficiency. Government incentives, such as grants or enterprise zones, can attract businesses. The nature of the business, whether online or physical, also matters: an e-commerce business may locate near distribution networks rather than customers. Other factors include competition, climate, and personal reasons of the owner. Businesses weigh these factors against objectives such as profit maximisation or growth.
Your focus
- Identify and describe factors that influence business location decisions.
- Explain how location factors affect business costs, revenues and competitiveness.
- Evaluate the relative importance of location factors for different types of business.
Business location exam tips
Marking Points
- Identify and explain at least three factors that influence location, such as proximity to market, labour supply and government incentives.
- Explain how a specific factor affects costs or revenues, for example locating near raw materials reduces transport costs.
- Apply location factors to a given business context, such as a restaurant choosing a town centre site for footfall.
- Analyse the trade-offs between different location factors, for example lower rent in a rural area versus reduced customer access.
- Evaluate which location factor is most important for a particular business and justify the choice.
Examiner Tips
- 💡Use the business context provided in the question to select the most relevant location factors.
- 💡When evaluating, compare factors and justify why one outweighs others for the specific business.
- 💡Include examples of real or hypothetical businesses to illustrate your points.
Common Mistakes
- Listing factors without explaining their impact on the business; correction: always link each factor to costs, revenues or competitiveness.
- Assuming all businesses prioritise the same factor; correction: a manufacturer may prioritise raw materials, while a retailer prioritises footfall.
- Ignoring the growth of online businesses; correction: consider how e-commerce reduces the importance of physical location for some firms.