17 Do you think Kapil should move to a cheaper location? Justify your answer. [6]

[BASEL Moderator]

Kapil is a successful law partnership in the centre of a large city. It offers a range of services to small and large business customers, including having meetings to give legal advice and writing contracts. Kapil’s Finance manager is worried about the high level of fixed costs. He believes this is due to Kapil’s good location. The Managing Director wants to buy a new information technology (IT) system to help improve internal communication. She thinks technology will help remove some communication barriers.

17 Do you think Kapil should move to a cheaper location? Justify your answer. [6]

Possible KN Points:
• Near to customers
• Availability of suitable workers
• Status / image
• Cost of rent
• Need to reduce costs
• Importance of location to business