3J - Global considerations

Question 1

Global sourcing of inputs

Answer 1

Involves a business acquiring raw materials and resources from overseas suppliers
Should consider:
- price of materials and resources
- delivery costs
- Extraction methods and their impact on the environment
- treat and pay workers
- how government regulates imports and exports

Add:
- lower input costs improve a business’s profitability and competitiveness
- Helps businesses compete against cheaper imports and expand into global markets
- Increase productivity, offer better products at lower prices

Diss:
- Additional expenses through tariffs
- Imports may be affected by government-imposed quotas
- Materials may be damaged during transport

Question 2

Overseas manufacture

Answer 2

Involves a business producing goods outside of the country where its HQ is located

Add:
- lower costs
- Higher output, improving profitability and competitiveness
- Faster market access

Diss:
- Poor corporate social responsibility practices in the country may reflect badly on the business
- Local employees may lose jobs if manufacturing moves overseas
- Poor coms and language barriers may lead to production and delivery delays

Question 3

Global outsourcing

Answer 3

Involves transferring specific business activities to an external business in an overseas country