You use this argument to specify the path where Apache should be installed on the file system. In this case, the path is specified as /usr/local/apache. This is the default directory where Apache is installed. However, you can specify an alternate path in this argument.
You might have several reasons for installing Apache in a directory other than the default directory. One reason might be your intention to preserve the default locations used by a specific Linux distribution. In addition, some people install several versions of Apache for testing purposes and, as a result, install different versions of Apache in different locations.