4.2.3 - Assessment Of A Country As A Production Location

Question 1

9 assessment factors of a country as a production location

Answer 1

• cost of production
• skills and availability of labour force
• infrastructure
• location in trade bloc
• government incentives
• ease of doing business
• political stability
• natural resources
• likely return on investment

Question 2

Def labour intensive

Answer 2

Describes a business process that relies more on people than machinery

Question 3

Def capital intensive

Answer 3

Describes a business process that relies more on machinery than people

Question 4

Explanation of cost of production

Answer 4

• Low costs of production attracts FDI to take advantage of labour force - especially if production is labour intensive
• land also may be cheaper meaning businesses can drive costs down

Question 5

Explanation of skills and availability of workforce

Answer 5

+ large unemployed population means a large pool of candidates for every position
- require skilled workers without good literacy education, some countries will struggle to be seen as attractive locations for production

Question 6

Explanations of infrastructure

Answer 6

• Transport and utilities must be up to scratch for modern manufacturing reliably
• transportation links are vital in moving goods around geographical businesses

Question 7

Explanation of location in trading bloc

Answer 7

• often a pull factor when location is in a trading bloc allowing easier access into market

Question 8

Explanation of government incentives

Answer 8

Governments use: grants, tax breaks, investment into infrastructure to attract FDI for: job creation, extra tax revenues, increasing skill levels

Question 9

Explanation of ease of doing business

Answer 9

Businesses will need to assess regulation, government interference and bureaucracy inefficiency in order to understand if they want that country as a production location

Question 10

Explanation of political stability

Answer 10

Eg governments changing their policies so businesses can’t plan for something, corruption and difficulty getting skilled workers in war torn countries

Question 11

Explanation of natural resources

Answer 11

Production locations set in close proximity to resources because need large quantities and its expensive to transport over large distances

Question 12

Explanation of likely return on investment

Answer 12

Profitability is the main objective for firms meaning cheaper locations seem more attractive. However, there can be limitations