4.2.3 - Assessing a Country as a Production Location

Question 1

What are the 9 factors which are used to assess?

Answer 1

• Government incentives
• Ease of doing business
• Political stability
• Natural resources
• Return on investment
• Location in trade blocs
• Infrastructure
• Skills/availability of labour force
• Cost of production

Question 2

Why is infrastructure important for production location?

Answer 2

Roads etc will affect the production process
- Internet may impact businesses
- Transportation of raw materials

Question 3

Why is cost of production important for production location?

Answer 3

Lower costs help to enhance profit margins and therefore charge lower prices - competitive advantage

Question 4

Why is skills and availability of workforce important for production location?

Answer 4

Impact quality of goods to ensure consumer satisfaction and sales
- Lower labour costs

Question 5

Why is location in a trading bloc important for production location?

Answer 5

• Access advanatges such as reduced protectionist measures

Question 6

Why is natural resources important for production location?

Answer 6

• Help reduce transportation costs
• Reduce delays

Question 7

Why is political stability important for production location?

Answer 7

Corrupt and lack of lawful political party could disrupt running and production
- An economy with a stable economy and government is seen as a less risky investment for a business