1. Factors That Affect Location
1.1. Labor costs
1.1.1. If production is labour intensive, it may make sense to move operations to a country that has a low minimum wage
1.2. Land costs
1.2.1. Costs depend on the country or geography of the location.
1.3. External economies of scale
1.3.1. Skilled labor
1.3.1.1. Depends on the effectiveness and quantity needed.
1.3.2. Shared infrastructure
1.3.2.1. Compiting firms using the same assets or machinery.
1.3.3. Improved image
1.3.3.1. Certain locations may, have a reputation for producing specific high-quality products.
1.3.4. Access to suppliers
1.3.4.1. Competition between suppliers can keep costs low or high.
1.4. Transportation and Infrastructure
1.4.1. Access to efficient transport networks allows customers to visit stores and suppliers to deliver raw materials, increasing potential sales while reducing costs.
1.5. Government assistance
1.5.1. Sometimes governments will offer grants to companies that relocate to an area of high unemployment.
1.6. International factors
1.6.1. Trade barriers
1.6.1.1. Taxes and quotas.
1.6.2. Trade barriers
1.6.2.1. The price for which a country’s currency can be exchanged for a different currency.
1.7. Company history
1.7.1. If a company has been in an area for a long time, it may make sense just to stay there.
2. Reorganizing Production
2.1. Outsourcing
2.1.1. Involves paying an outside company to carry out a task while the one who hire it stays in chrge and makes sure the work is well done.
2.2. Insourcing
2.2.1. Carrying out previously outsourced activities, using a company's own resources.
2.3. Offshoring
2.3.1. Relocation of a business function to another country.