LUNA

docx

School

Grand Canyon University *

*We aren’t endorsed by this school

Course

655

Subject

Business

Date

Nov 24, 2024

Type

docx

Pages

Uploaded by fnlmutuku

According to our reading, a business' location is very important to its operations. One essential element is supply chain that would depend, of course, on the facilities export sourcing location (Jacobs and Chase, 2020). Some of the key motivations or things to consider when choosing a location are included below: 1. Proximity to customers 2. Business climate 3. Total costs 4. Tariffs 5. Infrastructure 6. quality of labor 7. suppliers These are only a few things to consider when choosing a location or relocation according to our reading. As described by the items above, choosing a location can provide incentives and pros to a company. For instance, if a technology manufacturer were to move to a country that is proficient in microchip manufacturing the process to manufacture and export microchips would be a lot easier than it would be to relocate to a country that does not have the appropriate capabilities to manufacture microchips. Additionally, a company may be avoiding tariffs imposed by a country and may be opening alternative locations to avoid these tariffs and still be able to manufacture and export their goods. However, a multinational company could also face significant cons that could create problems. One of which could be political risk. The political climate in a nation can have a positive or negative impact on the financial management and stability of a company operating in said nation. For instance, let's say a company is operating in Mexico, Middle east, and Asia.

Mexico often has issues with government corruption that may impact the ability of a business to open a branch if the government would rather someone in high power to open their business instead and places high rates such as trade barriers for the foreign company. According to Investopedia, "employing hedging strategies and purchasing political risk insurance are two ways companies can reduce the impact of international risks" (Beers, B. 2023). Maintaining a diversified cash flow portfolio by operating in different countries and industries spreads the risk and helps ensure that a singular location will not have all of the adverse affects on cash flow. Reference: Beers, B. (July 2023). Top Risks for International Business. Investopedia. https://www.investopedia.com/ask/answers/06/ internationalfinancerisks.asp#:~:text=Employing%20hedging%20strategies %20and%20purchasing,impact%20of%20international%20business%20risks. Jacobs, F. R., & Chase, R. B. (2020). Operations and supply chain management (16th ed.). New York, NY: McGraw-Hill. ISBN-13: 9781264091676 REPLY  o LS

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

LUNA

Related Documents