Page 242 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies Section 4 Operations management

2 Your group should discuss the benefits and drawbacks of locating such a business within 2km of your school. List each
point you agree under the appropriate heading on your sheets of paper.
3 When all the groups have completed their discussion you should nominate two people from your group to report your
findings to the rest of the class. Ask one person to report on the benefits and the other to report on the drawbacks.
4 Your teacher will make a list on the board of all of the benefits and drawbacks that all the groups have produced.

CASE STUDY Agrid South Africa

Agrid chooses base in South Africa

Agrid South Africa, an offspring of Agrid Agrid chose South Africa for its estab-
International, was formed in July 1999. lished and proven manufacturing base,
They manufacture diesel/petrol engines skilled labour at reasonable rates and read-
and agricultural implements for small scale ily available management. Other attrac-
tions were the expansion of the local motor
farmers. industry, excellent telecommunications and
Agrid has focused on exporting its prod- the accessibility of sub-Saharan Africa,
ucts to Europe and other African coun- South America and Australia.
tries, more specifi cally Kenya, Nigeria,
Angola and Uganda. However, it recently A spokesman for the company said: ‘I see
base for exporting products to the world.’
240 found a gap in the local market for its South Africa as a low-cost manufacturing
products.

Source: Adapted from www.southafrica.info/business/investing/globalcomps.htm#.UsFsgEZFBMs

TASK
a Identify four benefits to Agrid International of locating in South Africa.
b Given the type of manufacturing activity of Agrid South Africa, what legal controls do you think might be placed on its
business?
c What other benefit has Agrid International obtained as a result of its decision to locate in South Africa?

TEST YOURSELF
1 State three factors that might influence location decisions.
2 Explain two reasons why a business may decide to relocate in another country.
3 Explain how legal factors can influence location decisions.

4 How can a relocation decision affect a business’s existing workforce?
5 How might consumers influence a location decision?
6 Should cost be the major influence on location decisions?
7 How and why might a country’s government encourage a business to locate in
their country?