conditions that prompt trade - pull factor 2

Question 1

what is offshoring?

Answer 1

• A business relocating part of its business overseas (WHERE)
• Activities are still undertaken by the business e.g. factory

Question 2

advantages of offshoring

Answer 2

• Take advantage of low labour costs in manufacturing
• Be closer to specialist suppliers
• Cost efficiencies, i.e. transport costs
• better skills
• It has to be more economical to produce goods abroad and transport them to the UK than to pay UK wages to be profitable

Question 3

disadvantages of offshoring

Answer 3

• Public perceptions
• Poor customer service levels
• Level of training required
• Risk to intellectual property – theft of ideas
• culture/language barriers

Question 4

what is outsourcing?

Answer 4

This is where a business function is contracted out to a third-party business (WHO)
Could be domestically or abroad

Question 5

advantage of outsourcing

Answer 5

• Takes advantage of specialist skills
• Cost savings, efficiencies gained

Question 6

disadvantages of outsourcing

Answer 6

• Loss of control over the delivery of the service
• Quality problems
• Reputational damage
• contracts that may be hard to get out of
• Cultural/Language barriers