Assessment Of A Country As A Production Location Flashcards
Why is infrastructure an important factor to consider when choosing production location?
For companies moving production to less developed countries the quality of infrastructure must be carefully considered because if it is poorly built and causes an accident then it will reflect badly on the company’s reputation
Why should businesses consider the country’s location in the trading bloc when moving production?
They have to consider which markets they can sell to within that bloc and which will be most successful for them
Why is it important for a business to consider government incentives when choosing a production location?
Many governments will want to attract foreign firms to build manufacturing facilities in their country because it would bring jobs and tax revenues so the government would offer these firms incentives such as grants to help purchase land, tax breaks or investment in local infrastructure
Why is the ease of doing business an important factor to consider when moving production?
To run a business, certain basic legal and other systems must be in place, many of which involve some level of bureaucracy which could make the country an attractive location - the ease of speed with which these basics of doing business can be accomplished in a production location
Why are natural resources an important factor to consider when moving production?
Locating to a supply of the natural resources needed for the production process will keep production costs low because transporting them long distance would be expensive
Why should businesses consider the likely return on investment when moving production?
Lower costs boost return on investment because profits will be larger each year because costs stay low
