Syllabus: International Baccalaureate - Individuals and Societies - Business management (Higher Level)
Module: Unit 5: Operations Management
Lesson: 5.4 Location
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Introduction
Unit 5.4 of the IB Business Management Higher Level syllabus focuses on Location – a critical decision area within operations management. This topic explores how and why businesses choose physical locations, and the consequences of those decisions on profitability, logistics, workforce, and competitiveness.
Location strategy aligns closely with commercial awareness, stakeholder understanding, and real-world problem-solving – all core to the Enterprise Skills framework. For educators, this unit provides rich opportunities to combine core curriculum teaching with workplace readiness and Gatsby Benchmark alignment.
Key Concepts
According to the official IB syllabus for Business Management HL, the following concepts are central to Unit 5.4 Location:
Factors influencing location decisions: including costs (land, labour, transport), proximity to markets and raw materials, access to skilled labour, and legal or environmental considerations.
Quantitative and qualitative location decision-making tools, such as:
Comparative grid analysis – evaluating sites based on weighted criteria.
Cost–profit–volume (CPV) analysis – determining break-even and profit potential at different locations.
Outsourcing and offshoring: how globalisation has influenced where businesses locate their operations.
Impact of location on other departments: such as marketing (target market access), HR (labour availability), and finance (investment requirements).
Industrial inertia: why some firms stay in less optimal locations.
Multisite location strategies: advantages and risks of expanding across multiple regions or countries.
These concepts support the IB learner profile by encouraging students to be thinkers, inquirers, and reflective decision-makers.
Real-World Relevance
The theory of business location becomes especially meaningful when students apply it to current business cases:
Example: Nissan Sunderland Plant
Nissan chose Sunderland in the UK for its major European plant due to a skilled manufacturing workforce, proximity to EU markets (pre-Brexit), and strong transport infrastructure. Post-Brexit, location strategy is under review, offering a live case for evaluating political and economic factors.
Example: Google’s Data Centres
Google locates its European data centres in Ireland, Finland, and the Netherlands – citing access to renewable energy, cool climates (lower cooling costs), and stable regulations. These factors mirror environmental and operational priorities in modern location decisions.
Example: ASOS and Zara Warehousing
E-commerce retailers like ASOS use centralised mega-warehouses to speed up fulfilment, while Zara’s supply chain success depends on locating factories close to its Spanish HQ to maintain speed-to-market agility.
These examples can be explored using Skills Hub tools that simulate similar decision-making environments.
How It’s Assessed
IB Business Management assessments include both external examinations and internal assessments (IAs). Unit 5.4 Location is assessed in the following ways:
Paper 1 (HL): Based on a pre-seen case study. Students may be asked to recommend a location strategy or evaluate different sites using data.
Paper 2 (HL): Data response and extended response questions may require application of location analysis tools (e.g., grid analysis or CPV).
Internal Assessment: Students might use location as a context for their own research-based business problem, especially when considering strategic decisions like expansion or relocation.
Command terms to teach explicitly include:
Evaluate – weigh pros and cons of location decisions.
Recommend – justify a decision using criteria.
Analyse – break down the impact of a location on performance.
Use of business simulations aligned to IB topics can also strengthen student analysis of location choices and help practice applying evidence to support recommendations.
Enterprise Skills Integration
This unit provides rich ground for embedding enterprise and workplace readiness skills:
Commercial Awareness: Students explore how operational decisions affect cost structures, access to markets, and supply chain resilience.
Decision-Making and Problem-Solving: Tools like grid analysis teach how to balance multiple stakeholder interests with data-driven logic.
Cross-Functional Thinking: Location choices affect marketing (customer access), HR (labour pool), and finance (investment/cash flow).
Strategic Communication: Justifying location decisions prepares students for boardroom-level thinking and stakeholder engagement.
Enterprise Skills’ Skills Hub Futures and Business Simulations directly build these competencies through scenario-based challenges mapped to the IB framework.
Careers Links
Unit 5.4 offers direct Gatsby Benchmark alignment:
Benchmark 4: Linking curriculum to careers – real location strategies from global firms contextualise learning.
Benchmark 5: Employer encounters – case studies from partners like Accenture or logistics providers show real decision pathways.
Benchmark 6: Experiences of workplaces – simulations replicate decision-making in high-stakes operational roles.
Relevant careers students can explore include:
Operations Manager
Supply Chain Analyst
Logistics Planner
Site Development Consultant
Retail Expansion Manager
Use careers worksheets or Skills Hub activities that map roles to skills developed in this topic.
Teaching Notes
Practical Strategies:
Start with a simulation: Use a real or fictional business looking to expand – students can compare cities using a weighted decision matrix.
Use news articles: Ask students to bring in recent stories about firms opening or closing locations, and analyse the reasoning.
Cross-subject collaboration: Geography departments may already teach location theory; co-teaching can strengthen connections.
Bring in employers: Local business leaders or logistics managers can speak about location strategy in practice (supports Benchmark 5).
Common Pitfalls:
Students often default to cost alone as the decision driver. Encourage a broader view including labour, infrastructure, ethics, and long-term strategic fit.
Misunderstanding industrial inertia – clarify that staying put can be a strategic choice, not a failure to innovate.
Extension Ideas:
Compare offshoring vs reshoring decisions post-Brexit.
Create a pitch for a business relocation – students must present to a ‘board’ and defend their choice.
Incorporate sustainability as an emerging decision factor.
