If a company is considering switching production to a country where wage costs are lower, to what other factors will it need to take into account before doing so?

1.- If a company is consumeing switching exertion to a province where wage costs be come in, to what other factors will it need to take into account before doing so?Research has shown that the boilers suit number one reason and motive for switching take to other countries is to reduce costs. In markets with limits in product an nonation price competition is more definitive, as well as being able to offer almost identical products at lower price. This has typically been the case with consumer products. A number of studies get down also identified quality and availability as vituperative aspects (Cho & Kang, 2000)Switching output to a lower wage land appears to be a good strategy for firms seeking to find its costs. An establishment would need to compargon the labour cost per building block produced compargond to the exist spatial relation, also it is important to see if the workers are amentiferous at the new location. Firms would face problems such(prenominal) as didactics costs, dispersal costs and even more taxes. in that location are both positive and negative aspects included in Global sourcing. It underside lead to improved competitive utility through lower costs and better geographical availability. The risks fabricate that firms could get into problems with transportations, technology, orphic information leaking out, and that the cost reductions may not be as great as expected (Worthington and Britton, 2006). Further, firms whitethorn meet problems as transportation problems, technological and capacity weaknesses in production, and lack of watchfulness systems. Additionally, features such as languages barriers, customs and switch politys are close to of the factors that a firm would need to consider before abject its production to another country. The transportation and logistics networks are perhaps not as reliable as in the home country, which may cause unexpected delays (Cho & Kang, 2000; Smith, 1999). For firms mov ing their production to another country, it ! is important to be aware of how their business relationships and networks could be affected too. There might be ethical problems, such as the room the workers are treated, in some countries workers are exploited and not paid well. 2. - Will change magnitude environmental standards imposed by government on businesses inevitably closure in high business costs?For some businesses, increased environmental standards reckon to be an opportunity instead of a threat, as doorman argues that the government creates barriers, because it restricts competition through the granting of monopolies and codes. Industries such as utilities are considered natural monopolies because it has been more efficient to dumbfound one voltaic company provide power to a locality than to allow for many electronic companies to compete in a local market. Additionally, firms that face high environmental abidance costs may lose market share to those focalize in slight regulated jurisdictions. New opport unities arise for firms to externalize their pollution by using less-regulated suppliers (Barton et al. 2007).

In other words, those part of the commodity ambit that generate most pollution slew be located in developing countries where environmental regulation is less stringent. all the hypotheses referred to so far are essentially pessimistic in that they assume that there is a affair between stricter environmental regulation and competitiveness. The Porter hypothesis claims that, on the contrary, environmental regulation can, and often does, lead to economic benefits and consequently to increased competitiv eness. If that were broadly the case, then the conce! rns raised above would be quite crazy (Barton et al. 2007). References:Cho, J. & Kang, J. (2000). Benefits and challenges of Global sourcing: perceptions of U.Sapparel retail firms. International selling Review, Vol. 18, No. 5, pp. 542-561. Smith, J. M. (1999). distributor point selection for global purchasing. European Journal of Purchasing& publish Management, 5. pp. 117-127Worthington, I and Britton, C (2006), The duty Environment fifth discrepancy PearsonEducation Limited, Essex. Porter, Michael E. Competitive Strategy: Techniques for analysing industries and competitorsJonathan Barton, Rhys Jenkins, Anthony Bartzokas, Jan Hesselberg, and Hege Knutsen(2007) ?environmental enactment and industrial scrap in Pollution-intensive Industries? in Industrial Innovation and Environmental Regulation Edited by Saeed Parto and brent goose Herbert-Copley If you want to get a full essay, order it on our website: OrderCustomPaper.com

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