- Created by: nana_16
- Created on: 24-12-19 13:34
Why trade internationally
Strong economic growth for the home nation
Rising consumer incomes and growing ‘middle class’
Opportunities for joint ventures with local businesses
Culture/varying customer needs
Difficult to protect ideas from competition due to inadequate laws
Infrastructure could be poor, making distribution and marketing difficult.
Potential problems of International Location
Language and Cultural Differences
Language barrier can cause diseconomies. of scale (communication errors). Cultural differences can impact on work practices between countries.
Impact on public image
When countries relocate abroad, they can attract media attention over allegations of worker exploitation in low cost economies; a question of labour laws
Economic and Political Stability
Chances of rapid and unforeseen changes in many countries due to economic and political upheaval = firms choose countries with a history of economic and political stability.
Reasons why firms locate abroad
To exploit new markets…