Question

Research a USA company that recently moved a corporate headquarters or factory or research and development center from the USA to another country. What were the advantages and disadvantages of the company in their offshoring decision? Develop a government-based incentive system to keep this offshoring from happening.

Answer 1

Recently Apple Inc decided to shift some of its manufacturing units in India for iPhone The main advantage of this decision will be as below-

The company can be benefited by establishing the manufacturing unit near to the market as India is one of the largest purchasers of iPhone

The cost of production will be lower in India

There are many government incentives that are provided to Apple Inc. to establish the manufacturing plant

The raw material and human resources may be easily available

Disadvantages=

This can increase the unemployment level in the USA

There is a possibility of losing the intellectual property if some vital information related to product production goes out

The increasing tension of India with the neighboring countries will create a negative environment

The country may face a clash in the working culture of the USA and India

possible government incentive plan=

The US government can offer a tax rebate to the company

The government can facilitate cheap land for the establishment off the manufacturing unit

The government can provide the duty-free export for a certain number of year

The government can facilitate better training centers so that the company can get the required number of talents employees

The company can also provide subsidy to the company