4.2.3 Assessment Of A Country As A Production Location

Question 1

What are the factors making a nation attractive to produce in

Answer 1

• 1 cost of production
• 2 skill and availability of workforce
• 3 infrastructure
• 4 trading bloc
• 5 ease of doing business
• 6 government incentives
• 7 political stability
• 8 natural resources
• 9 likely return on investment

Question 2

Explain cost of production as an influencing factor of the attractiveness of a production location

Answer 2

• foreign workers can be paI lower wages
• the cost of land, offices and utilities may be cheaper abroad

Question 3

Explain skills and availability of workforce as an influencing factor of the attractiveness of a production location

Answer 3

• some businesses need a skilled labour force thats available elsewhere
• it may also be easy to build a large labour force in areas of high unemployment

Question 4

Explain how trading blocs are an influencing factor of the attractiveness of a production location

Answer 4

• reduces tariff payments on imports And exports

Question 5

Explain how ease of doing business is an influencing factor of the attractiveness of a production location

Answer 5

• may move closer to the market they are trying to distribute to
• regulations like environmental protection laws can be avoided
• business must consider the reaction of the people within the country they are moving to

Question 6

Explain how government incentives are an influencing factor of the attractiveness of a production location

Answer 6

• could include, lower corporation tax, loans or grants
• governments do this to increase FDI as it will provide benefits like increased employment and tax revenue

Question 7

Explain how political stability is an influencing factor of the attractiveness of a production location

Answer 7

• political stability creates uncertainty making planning difficult
• businesses will avoid country’s with corruption as it can damage the brand image and cost them money

Question 8

Explain how natural resources are an influencing factor of the attractiveness of a production location

Answer 8

• proximity of raw materials, being close reduces delays and costs
• agricultural firms will move to the best weather conditions

Question 9

Explain how the likelihood of returning on investment is an influencing factor of the attractiveness of a production location

Answer 9

• a business will want a larger long-term saving if they are going to move their production overseas