🧮 How businesses evaluate location options
Big Idea: Choosing a location isn't just a gut feeling — businesses use structured methods to compare options and make the best decision. 🎯
Methods for evaluating locations
- Cost-benefit analysis — weigh up the financial pros and cons of each option
- Quantitative scoring — assign numerical scores to key factors and compare totals
- Break-even analysis — calculate how many sales are needed at each location to cover costs
- Investment appraisal — use payback period or ARR to compare long-term returns
Exam tip: When comparing two location options, use both quantitative (numbers) and qualitative (judgement) arguments for a balanced answer.
Free preview
This is the free notes preview
You're reading the free notes. Aimnova Pro unlocks the full study experience — and you can try it free for 7 days:
- FlashcardsLock in vocabulary and key terms with spaced repetition.
- Practice questionsAnswer exam-style questions and get instant AI marking.
- Mock exams & past-paper vaultSit full mocks and see exactly how examiners award marks.
- Personalised study planA daily plan built around your exam date and weak areas.
Start your 7-day free trial Full access to Aimnova Pro · cancel anytime
🚚 Relocation and reorganisation
Sometimes a business needs to move from its current location. This is a major strategic decision with big implications.
Why might a business relocate?
- To be closer to customers or a growing market
- To reduce costs (cheaper rent, wages or taxes)
- To access better infrastructure or transport links
- Forced by external factors (lease expiry, natural disaster, government policy)
Risks of relocation
- High moving costs and disruption to operations
- Loss of skilled staff who cannot or will not move
- Customers may be lost if the business moves too far
- Takes time to establish in a new area
Relocation is a high-risk, high-reward decision. It must be justified by long-term benefits that outweigh the short-term costs and disruption. 📦➡️🏢
Learn what examiners really want
See exactly what to write to score full marks. Our AI shows you model answers and the key phrases examiners look for.
Try AI Feedback Free7-day free trial • No card required
📝 Tackling location questions in exams
Location questions often appear as 10-mark 'recommend' or 'evaluate' questions where you compare two options.
How to structure your answer
- Identify the key factors for THIS business (use the case study data!)
- Argue FOR Option A — explain how it meets the business's needs
- Argue FOR Option B — explain its advantages too
- Evaluate — weigh up which factors matter MOST for this business
- Give a justified conclusion — which option is best and WHY
Common mistake: Don't just list generic location factors! You MUST link them to the specific business in the case study to score top marks.
Use stakeholder analysis: How will each option affect employees, customers, shareholders and the local community?