Question

how important is the distance ( to final and source markets ) is to businesses operating internationally today? (500 words essay)

Answer 1

We will not be able to write a 500 words essay for you. However, I have put together my thoughts. Please use them as a skeleton, add some more meat around them, add your own thoughts and create your essay.

Logistics, though a non value adding activity in the entire chain, plays a crucial role in today's market place.

Today, production and consumption centers are located far away. The business may like to expand taking its products to far flung areas where they see better growth prospects but still keep the production at places where there is time and labor arbitrage. The distance therefore becomes a crucial element in businesses operating internationally. The distance determines and shapes the various elements of the international business:

• The entire supply chain
• The logistics parts
• Mode of transportation: Air, water, inland
• The cost of logistics
• The impact of cost of logistics on the final product price
• Whether it really makes sense to produce elsewhere and ship

At times, this distance can prevent the business from being profitable. Lots of e retailers (even Amazon Inc. at some point of time) have struggled to reach the path to profitability because of last mile delivery and the cost of logistics associated with the last mile delivery. The location of production centers and consumption centers are therefore very crucial.