The Increasing Trend for UK Companies to Relocate to Lower Cost Locations Abroad
For this report I will be answering this question, which is:
Explain the increasing trend for UK companies to relocate to lower
cost locations abroad. Is this the only strategy that UK businesses
should follow when dealing with price competitions?
For the information I will be using the exodus abroad from the
Business review as proof of evidence. [1]
It has been in the papers over the past few years that companies have
been leaving the UK to move there company because they were either
losing profit or there product/service wasn't doing very well.
Business companies thinks that moving to another country like China
because running the company there is cheaper than the UK because it
doesn't cost a lot to build in that country that if they move that
will make employees that already work in that company redundant which
will not be faire on the people that worked for that company for
years. But there has got to be another way than moving or merging with
companies in another country, like they could ask there customers what
they think the company can improve on to increase there profit.
Over time there will be more UK businesses in other countries to help
their employment but what about the UK people that are looking for
jobs and has to travel possibly to another country to work, it would
that those people will miss there family and friends and they have to
get property (work permits for working other in that country) over
there and try to come home for holidays which will not be faire on the
parents with young children.
A survey was done by the engineering employers federation that found
out that one in three companies was planning to increase its
proportion of foreign production over the next 5 years. This means
that the more companies that move the more people that are unemployed
in the UK and more firms are doing this at the moment.
There are several reasons why companies relocate to other countries
The labor market entails the relations between the demand for labor, in one hand, and labor supply, on the other hand. Labor demand is defined by the amount of labor firms demand in order to produce certain amount of goods and services. Labor supply refers to the productive segment of the population that is determined by the size of the population. Within the labor market, workers can be classified as either economically active (the employed and the unemployed) or economically active. The employed encompasses people in paid employment or in self employment while the unemployed refers to people who are not working but have actively been looking for job and are willing to start work immediately. A person is classified as economically inactive if they are neither looking for work nor are they ready to start work. The labor force participation and the unemployment rate are major indicators of the health of an economy. This paper will compare the economies of the United Kingdom and Germany as well as their labor market (Shimer 2010).
Outsourcing occurs when products or services are obtained by an outside supplier (Vonderembse & White, 2013). Companies may decide to outsource if it can be obtained less expensively due to specialization or the other company may have proprietary technology that gives them a competitive advantage (Vonderembse & White, 2013). This paper will analyze trade-offs for productivity improvements, discuss both the advantages and disadvantages of global sourcing versus producing in the United States, recommend a low labor cost country based on inputs, trade-offs and global advantages and give an example of a product of the specific country.
The latest official figures indicate that there are now more than 37,000 transnational companies controlling almost a quarter of a million subsidiaries. Ninety per cent or 34,000 are based in industrialised countries. Just over half of their subsidiaries are operating in the Developing World. 56% of the parent corporations have their base in the European Union but only 24% of their subsidiaries operate within European boundaries. The number of multinationals is growing daily and increasingly have a base in the newly industrialised countries.
Outsourcing has only very recently become an issue in the United States, and as a result it has become a very popular political issue during campaigns for presidency. Outsourcing is the idea that a company will subcontract to a third party, usually outside of the US, for various parts of its business structure. An example of this and perhaps the largest source of outsourcing is call centers for tech support, where a company will subcontract to a third party and that party will build up the call center and hire the workers for it. Many people have been affected by outsourcing since it started being used widely in the 1980s, and most would argue that outsourcing is not a good business model, that while it not only negatively affects them, it affects the whole economy. While there are some unmistakable positives to outsourcing, I would argue that as a whole, the negatives far outweigh the positives and outsourcing is bad for the United States.
it will be a long time before they get back to the country they were
daily bases and live for the American dream. The whole point of the two different places is to
The presence of foreign firms improves domestic competition; if the foreign entrant is bringing anything new to the table in order to expand in a new market, it brings technology and ideas that domestic companies can emulate. This is especially true in the case of countries new to capitalism, such as China. According to Crocker and Yi-Chung (2004) foreign firms entering China during the 1980s faced negligible competition from domestic businesses. Large multinational enterprises (MNE) such as Procter and Gamble (P&G) and Unilever were rapidly able to capture large market share in China. Within ten years, they began to encounter pressure from domestic companies that marketed less expensive, all be it lower quality, replacements. While much of the increased competitions MNEs confront in China are foreign, domestic and joint ventures firms, they also combat illicit competition from knockoff, or pirated products.
As more companies expand their business globally, they are seeing more opportunities and an increased set of threats to the market. Threats like war, political revolutions, new currencies, and natural disasters can affect growth and political stability throughout the world, so in order to successfully compete in the international market more companies are faced with the decision of relocating part of their operation offshore. This paper will address what key elements companies in this situation need to address, such as, quality of customer service provided, security of confidential information, and the possibilities of cost savings, in order to be sure that outsourcing is the best solution for their company.
The international business development has heightened the importance of international market selection (IMS) of companies, especially for their exporting strategy. However, not many companies really comprehend the geographical, social, economic characteristics of foreign countries in comparison with their home countries (Cavusgil, 1985). This fact has challenged many studies to create the optimal approach for IMS. The major question is: Which foreign market should a company enter? Thus, this report focuses on providing a practical consultancy to evaluate and determine its most appropriate foreign markets.
Global business is widely growing and increasing day by day, it has indeed manufactured benefits to both world and individual economy of a country. It plays a vital role to make it sustain in the long term profitability and also helps to improve interconnection between countries. Tourism business is however inter-related with world business and economy as it contributes a large amount of money exchange and also cuts the boundary of cultural and social backgrounds in other words the world has become local to everyone through tourism and globalization. Tourism in other words is a business which has grown globally and has become popular by marketing its products and aquatics every where around the world.
In recent decades, the process of globalization has accelerated and the world economy has become increasingly interdependent. The rise in the number of businesses that extensively operate in more than one foreign country, which is known as multinational corporations, plays an important role in the ongoing procedure of globalization. The United Nations has reported that multinational corporations hold one-third of world’s productive assets and control 70 percent of world trade (Schermerhorn et al., 2014). As there is a considerable growth in international businesses, worldwide economy is becoming more highly competitive. The global economy not only offers great opportunities for multinational enterprises but also on the other hand, creates many difficulties for them. Therefore, success in the large-scale economy requires a number of elements. One of the major determinants is dependent on global managers. In the operation of organizations, managers may encounter different international management challenges that restrict their business development. These challenges often include issues associated with the host countries, the global workforce diversity management, management across cultures, difficulties in competitive global business environment as well as in the process of global planning and controlling. This essay is going to discuss the above international management challenges in a broad sense and giving illustration in aspects of each challenge.
In the other side on hand, people in the nation are obligated to leave their nation because can’t articu...
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