Bullet point 4 - Manufacturing in the UK - Research

This is full research for use in answering bullet point 4 questions of the AQA spec research theme for business studies

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  • Created on: 22-04-15 09:39
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Bullet Point 4: Factors affecting UK location decisions by manufacturing businesses (Factors impacting UK
Location)
Definitions: UK Locational Decision Key Factors/Drivers:
Offshoring : the relocation of a Access to skilled, highly flexible labour force
business process or capacity from a Access to EU market
home country to another Access to funding from different governments and
Reshoring : the relocation of companies all over the word if you choose to have your
production capacity from an
company in another country
off-shored location back to the home
Openness to Trade
base
Exchange rate: the price of one Competitive Tax Rates that may allow you to save costs if
currency expressed in another, which the countries you are in have lower rates of tax than the
determines the price of goods & country you are in
services bought and sold Made in Britain Status ­ image of high quality which is
Emerging markets : less-developed wanted by a lot of countries and so this will look
economies with faster than average appealing, meaning more sales
rates of economic growth
Supply chain :system of businesses,
people, activities, information, and
resources involved in moving a
product from supplier to customer
Key Facts and Figures: Why was this a key influence?
State industry and businesses Remember to consider what TYPE of business/industry it was
and therefore why it influenced.
Automotive industry - UK has become Mini, Jaguar and Range Rover are all on the rise after £6billion of
the car production capital of Europe mostly private funds have been ploughed into improving
British made cars are now sold in over factories and research into new models.
170 different countries and most cars
that are British made are then on
foreign roads.
Economy in the UK is in a growth Sunderland Nissan manufacturing factory ­ " the Sunderland
stage, meaning that the businesses plant is setting an important benchmark for quality and
know they can grow and become efficiency in Europe and around the world"
more successful as the economy JLR has a 76% rise in the amount of cars that they are selling to
grows and the amount of money in China, because China want the quality that comes from this
the economy rises. It's a growth and British made car
financial tactic/strategy
Products that are made in Britain are Cocorose London decided to re-shore back to the UK. Making a
known to be of a high quality and are range that is completely made in England. Believes that
known to be a good price for the England will be the best place in Norwich, for the quality and
quality that you are getting so the production of the all English line. Prefer to out-source
manufacturers want to make their rather than off-shore
products over here and people are
more likely to buy products if they
know that it has been British made
Manufacturers are being offered
support and funding from the
government to encourage companies
to stay in the UK. SME manufacturers
promises from the government
Key Evaluation points and depends upon factors:

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The reasons that a business will decide to re-shore to the UK has many depends upon factors:
Products
Resource requirements
Financial situation
Objectives
Customer expectations
To what extent do you think that offshoring manufacturing from the UK to low cost countries overseas will
inevitably lead to increased profitability?…read more

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Bullet Point 4: Factors affecting UK location decisions by manufacturing businesses (Factors impacting
Off-shoring)
Definitions: Off-shoring Decision Key Factors/Drivers:
Offshoring : the relocation of a 1. Labour costs (73%) - Wage rates lower in Eastern Europe
business process or capacity from a and Far East.
home country to another 2.…read more

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Goods with high value to weight ratio - as long distance transport economically viable, e.g:
textiles, clothing
leather, furniture
jewellery, toys
But would not be appropriate for firms such as:
Aerospace, defence - due to low volume, high-tech, security.
Some building products - due to small amount of labour.…read more

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Bullet Point 4: Factors affecting UK location decisions by manufacturing businesses (Factors impacting
Re-shoring)
Definitions: Re-shoring Decision Key Factors/Drivers:
Offshoring : the relocation of a May 2014: IMechE /BDO survey found following reasons as to
business process or capacity from a why manufacturing businesses want to re-shore to the UK:
home country to another 1. Quality (72%) ­ some companies were having concerns
Reshoring : the relocation of over the quality of the products that they were producing
production capacity from an 2.…read more

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Food industry Luxury chocolate brand Hotel Chocolat chose to Reshore in order
Hotel Chocolat to protect their vision as well as to keep ideas in-house
Key Evaluation points and depends upon factors:
Reshoring to the UK will depend on:
Wages & other labour costs (depends on degree of labour / capital intensity)
Energy costs (relative to alternatives ­ will depend on how energy-intensive the process is)
Currency values (though currency risk can be hedged by operating in more than one location)
Legal & regulatory environments…read more

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