Moving production abroad

The advantages and disadvantages of moving production to other countries. (my first use of the advantages/disadvantages table)

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Moving production abroad

Advantages

  • It can be cheaper for the company to manufacture in areas where wages are cheaper and supplies are more plentiful.
  • The fact that a business is cheaper helps it compete in its home market
  • Some businesses require skills which may only be available in some economies.
  • Moving abroad can bring benefits to the area which the company is moving to

Disadvantages

  • Can damage image and thus sales
  • Can mean making people redundant in the home nation which can damage PR
  • It may cost significantly more to ship goods around the world than it would otherwise as well as some countries excising protectionism

Evaluation

It is important to consider whether it is important for the company to move for example it may not be the best for PR to move but the company has to move in order to keep up with the competitionSome products pride themselves in being for example 'British made' while with other products it is impossible to move abroad due to costs of production for example soft drinks are bottled in the nation they are being sold in to save money in transport

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