Assessing a Country as a Production Location 4.2.3

Question 1

Cost of production

Answer 1

One of the main reasons why businesses move proaction overseas is that they can often pay foreign workers a much lower wage. Also the cost of land, office space and utilities also tends to be cheaper overseas. Therefore the business can increase profit margins or charged lower prices to gain competitive advantage

Question 2

Skills and availability of labour force

Answer 2

Some businesses require skilled labour so might choose to relocate production to a country with a supply of labour with the right skills. Also if the quality of the workforce is better, the quality of the products will be better

Question 3

Infrastructure

Answer 3

A business needs to see if a country’s infrastructure is suited to its needs

Question 4

Location in a trading bloc

Answer 4

A business located in a market within a trade bloc will be able to access many advantages such as reduced protectionist measures

Question 5

Ease of doing business

Answer 5

A business will want to locate in an area where there is limited bureaucracy, so the process of establishing production facilities is not delayed or does not incur high costs