07 Identify and explain two factors that might influence Ali’s choice of location for the business. [6]

[BASEL Moderator]

Moeen and Ali plan to start up a small luxury hotel in the centre of a city in country R. They have a budget of $30 000 to pay for all costs. After researching different types of business organisation, Moeen thinks the hotel should be a private limited company. If the business is to be successful, Ali knows choosing the right location will be important. He cannot decide whether to recruit full-time or part-time employees.

07 Identify and explain two factors that might influence Ali’s choice of location for the business. [6]

Possible KN Points:
• Competition
• Cost of land
• Availability of suitable land
• OR available space for parking
• Close to customers/level of demand
• Infrastructure, e.g. water, electricity, internet OR transport links
• Image/environment
• Government regulations
• Access to suitable employees
• Close to suppliers