Entrepreneurship

International Entrepreneur

opportunities

By

Dr.Emad Alramada

Global Location

• In case of global locations there is scope for virtual proximity and virtual

factory.

• REASONS FOR A GLOBAL/FOREIGN LOCATION

1. Tangible Reasons

• Reaching the customer

• The host country may offer substantial tax advantages compared to the

home country.

• The costs of manufacturing and running operations may be substantially

less in that foreign country. This may be due to lower labour costs, lower

raw material cost, better availability of the inputs like materials, energy,

water, ores, metals, key personnel etc.

• The company may overcome the tariff barriers by setting up a

manufacturing plant in a foreign country rather than exporting the items to

that country.

2. Intangible Reasons

A. Customer-related Reasons

1. With an operations facility in the foreign country,

the firm’s customers may feel secure that the firm is

more accessible. Accessibility is an important

‘service quality’ determinant.

2. The firm may be able to give a personal tough.

3. The firm may interact more intimately with its

customers and may thus understand their

requirements better.

4. It may also discover other potential customers in the

foreign location.

B. Organisational Learning-related Reasons

1.

2.

3.

4.

The firm can learn advanced technology. For example, it is possible

that cutting-edge technologies can be learn by having operations in

an technologically more advanced country. The firm can learn from

advanced research laboratories/universities in that country. Such

learning may help the entire product-line of the company.

The firm can learn from its customers abroad. A physical location

there may be essential towards this goal.

It can also learn from its competitors operating in that country. For

this reason, it may have to be physically present where the action is.

The firm may also learn from its suppliers abroad. If the firm has a

manufacturing...