Assesing A Country As A Production Location (section 18) Flashcards
What will a business consider when deciding where to locate their production.
Costs of production
Skills and availability of the workforce
Infrastructure
Trading blocs
Ease of doing business
Natural resources
Why might a business consider the cost of the production when deciding where to locate production
One of the main reasons that businesses move their production overseas is that they can pay foreign staff low wages, and this can be useful for businesses that done need skilled labour
The cost of the land and office space needed for production will also be cheaper overseas, especially in emerging economies.
Why might a business consider trading blocs when deciding where to locate production
Trading blocs can reduce or remove the import duties of a product, and they could put a tariff on them (have to pay a tax)
More difficult to trade
Expensive
Why might a business need to consider the skills of the workforce and availability when deciding where to locate production
The workforce needs to have the right skills to do the job, otherwise they will need to undergo training (expensive and time consuming)
They might also need specific supply’s or advances technology (India would be a good place)
Why might a business consider the natural resources when deciding where to locate production
Firms might need specific raw materials to produce their products, therefore wiki have to locate in a business where they are rich in these materials. This will reduce the price fo transporting these materials and also minimise the chance of delays.
Why might a business need to consider the infrastructure of a country when deciding where to locate production
They will have to consider, roads railways and ports to enable they can export and import products.
Availability and service of IT and banks
Availability of utilities such as electricity, energy suppliers and waste disposal.
High security such as having low crime rates
