Business – 9.1 Location and scale – Location | e-Consult
9.1 Location and scale – Location (1 questions)
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Companies offshore for several strategic reasons:
- Cost reduction: Lower labour wages in developing economies can significantly cut unit costs.
- Access to specialised skills: Certain regions have clusters of expertise (e.g., IT services in India).
- Economies of scale: Large offshore facilities can achieve higher output levels and spread fixed costs.
- Market proximity: Producing closer to emerging markets can reduce shipping times and tariffs.
- Regulatory advantages: Some jurisdictions offer tax incentives or relaxed environmental regulations.