International Business: Competing in the Global Marketplace
International Business: Competing in the Global Marketplace
11th Edition
ISBN: 9781259578113
Author: Charles W. L. Hill Dr, G. Tomas M. Hult
Publisher: McGraw-Hill Education
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Chapter 17, Problem 1CTD
Summary Introduction

To explain: The possible locations that must be selected by the firm for its plants.

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Explanation of Solution

The possible locations that must be selected by the firm for its plants:

The firm must be looking at a concentrated manufacturing strategy because of the following reasons:

  • The tariffs for the industry are very low.
  • The cost required to build a plant to produce the microprocessors are very high.
  • The value to weight ratio of the product is very high.

The firm should look at the following factors before determining the appropriate location. They are:

  • Country factors.
  • Technological factors and
  • Product factors.

These factors will probably limit the new locations to any one of the developed nations. They have to select a country with a pool of skilled workers. The firm will be forced to select a technically strong country as it would like to reduce the costs involved in constructing a plant. The product will be developed keeping in mind the value to weight ratio and the universal appeal for the product.

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