Question

Why do U.S. corporations build manufacturing plants abroad when they can build them at home? Use a practical example to illustrate your point.

Answer 1

Answer:-

To recognize: The reasons behind establishment of manufacturing plants in forgein country instead of home country.

Presentation:

Globalization:

It alludes to a procedure which demonstrates the tasks of the organization at worldwide level (in foreign nations).

The explanations for foundation of assembling plants in foreign nation are referenced below:

Low-cost production

Evasion of government rules and guidelines

Large market

Availability of crude material

Low-cost production: The organizations can without much of a stretch be profited through the foundation of assembling plants in such nations which will be demonstrated low-cost district since high production cost diminishes the profits of the organization.

Evasion of government rules and guidelines: To evade the exacting strategies or rules and guidelines forced by government for assembling units, organizations build up their assembling units in such nations, which have liberal business approaches in correlation of household nation.

Large market: An organization can investigate market of foreign nations to pull in clients of that nation and uses this as a chance, which can help for the development of the organization.

Availability of crude material: The crude materials are differentiated topographically everywhere throughout the world. Along these lines, so as to get the crude materials effectively, organizations needs to set up its assembling plant

as indicated by the availability, which brings about significant expense to gain crude material. This will keep the cost of crude material low.

Conclusion

Thus, the variables because of which organization build up assembling units in abroad incorporates low cost of production, availability of market and crude material, and liberal government approaches.

For example: availability of cheap labor.

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