1. Chapter 11
Key 2 & 3
Different Distributions and
Locations of Industry
Including Weber’s Theory

2. I Industrial Profits
• Industries are in business to make money. In
order to make money two important geographic
factors must be considered
– Situation factors involve transporting materials to
and from a factory. A firm seeks a location that
minimizes the cost of transporting inputs to the factory
and finished goods to the consumer
– Site Factors result from the unique characteristics of
a location. Land, labor, and capital are the three
traditional production factors that may vary among
location.

3. II Situation Factors
• Manufacturers buy materials, energy,
machinery, and services know as inputs and sell
finished products to consumers
• Situation depends on the transportation costs
associated with inputs and finished products.
• If inputs cost more, factory will be located close
to inputs, if finished product costs more, factory
will be located near consumers

4. III Location Near Inputs
• Inputs could be raw materials such as wood,
minerals, or animals, or they could be parts or
materials from other companies. If shipping these
inputs is very expensive factories locate near inputs.
• Often these are bulk-reducing industries where the
input weighs more than the final product
• Examples from the book to read and be familiar with
– Copper Industry (page 381)
– Steel Industry (page 381-382)

5. IV Location Near Markets
• If products are more expensive to ship than
inputs, manufacturers will locate closer to
consumers. This type of situation is critical for
three types of industries
– Bulk-Gaining
• Gains volume or weight during production. Examples
include water and beer bottlers, fabricated products like TVs,
refrigerators and cars
– Single-Market
• Companies that sell to one market in one location. Examples
are textile components such as zippers, clasps, clips, and
pins, as well as auto parts manufacturers.
– Perishable
• Mainly food products, but also include Newspapers

6. V Ship, Rail, Truck, Air
• Costs are calculated to figure which type of
transport is cheaper for inputs and products.
• Regardless of mode of transportation, cost
increase each time that an input or product
switches modes.
• Many companies locate at a Break-of-Bulk point,
or where transfer among transportation modes is
possible such as a seaports or airports
• Currently situation in regards to markets and
break-of –bulk points are more important than
location near raw materials

7. VI Site Factors
• The cost of conducting business also
depends on three site production factors
– Land
– Labor
– Capital

8. VII Land
• Several factors are considered when it
comes to selecting land to build a factory
– Cost of land. Land usually is cheaper in
suburban or rural areas
– Available power sources. Every factory
needs power, the cheaper the better
– Other site influences such as climate,
topography, recreation, cost of living and
cultural facilities. Even major sports are
sometimes considered

9. VIII Labor
• Labor costs vary between countries as well as
within regions of a country.
• Some industries are labor-intensive industries
where labor costs are a high percentage of a
companies expenses.
• Some labor-intensive industries require less
skilled and inexpensive labor such as textile and
clothing (see pages 388-392) others require
highly skilled workers such as high tech
industries. (see page 392)

10. IX Capital
• Behold the power of MONEY
• Companies need money to make products to
sell. Companies will locate where there are
people willing to invest in a product.
• The San Francisco Bay area (Silicon Valley) was
more dependant on people willing to risk money
on high tech computer companies than the
skilled labor force in the area.
• Money is the main factor in the distribution of
industry in LDCs. Governments try to show
stability to attract MDC money for industry.

11. X Obstacles to optimum Location
• Site and Situation can not always explain the
location of a company
• Some are said to be “Footloose” meaning that
they can locate in a variety of places and be
successful.
• The knowledge of executives can make a
difference
• Personal preferences of executives can be a
determining factor
• Sometimes location is determined by history,
mergers, cost of relocating, or other external
factors

12. XI Weber’s Location Model
or Least-Cost Theory
• Alfred Weber developed a model for secondary
industry much as Von Thunen developed a
model for agriculture based on Site and
Situation. His model to determine the
comparative advantage (the advantage of one
location over another) of locations took three
factors into account
– Transportation
– Labor
– Agglomeration
• This is when a large number of businesses cluster in the
same area to assist and supply each other. Over
agglomeration can lead to high rent, high wages, and
transport costs and result in deglomeration where industries
move from crowded urban areas