Assessment of a country as a production location Flashcards
What are the factors to consider?
cost of production skills and availability of labour force infrastructure location in trade bloc government incentives ease of doing business political stability natural resources likely return on investment
name an advantage and a disadvantage of low costs of production for a business?
+ Lower costs means higher profit
- may be accused of not paying foreign workers enough to live on which can hurt brand image
name the advantages and disadvantages of relocating to a country with high unemployment and low skilled labour?
\+ Easier to recruit people \+ creating jobs for the locals \+ business can pay less in wages than in a country with high skilled labour. - unethical if the pay is too low - unethical if workplace isn't safe
Why would a business that imports and exports physical products care about infrastructure?
So they can have fast and safe routes to a port or airport so they can move there products to their consumer’s.
What is an advantage of a company having production in a trading bloc such as NAFTA/USMCA
It can reduce trade barriers such as tariffs when selling it’s products to member states.
Why do some governments provide incentives such as grants for companies to open up production in their country?
They do this as it attracts Inward FDI which brings in money from increased employment and tax revenue
