Producing Abroad
- Created by: tanja soulsby
- Created on: 05-06-17 09:50
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- Producing Abroad ... ????
- Can reduce costs
- One main reason of offshoring is that they can pay foreign workers lower wages than UK employees
- Some companies accused of not paying employees enough - unethical
- Cost of land and office space cheaper overseas
- Especially in emerging markets
- Utilities like water & electricity might also be cheaper than in the UK
- One main reason of offshoring is that they can pay foreign workers lower wages than UK employees
- Way of targeting new international markets
- Locating a firm close to the overseas market makes it easier to spot local market trends
- Company able to absorb more local knowledge
- Less likely to make expensive marketing errors
- Might even spot new market niches
- Locating close to new international market will make distribution of products to market easier and decrease companies distribution costs to that market
- Helps companies avoid trade barriers
- Some countries create trade barriers to protect domestic companies from foreign competition
- Taxes
- Restrictions on sales of goods from abroad
- Locating part of a business in a country with trade barriers helps companies get round these penalties
- Trade barriers can protect domestic industries from foreign competition causing them to become inefficient
- Could mean a foreign company locating in a country will have a competitive advantage - more efficient
- Some countries create trade barriers to protect domestic companies from foreign competition
- Made easier by improved transport and communication links
- Price and availability of air travel means its easy for people to travel between overseas locations
- Trading overseas been made easier because countries with emerging markets investing heavily in infrastructure
- Means they have better road & rail networks & ports that in the past
- Easier with technological developments
- Businesses can communicate internationally
- Email
- Don't have to leave the UK
- Video-conferencing
- Don't have to leave the UK
- Email
- Businesses can communicate internationally
- Can reduce costs
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