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There are many reasons why a British based business today may want to transfer production overseas. One of the main reasons is because of the resources that are needed to produce the products. Resources can often be cheaper abroad and obviously reduce costs for the business. Also if the business moves closer to where the resources are then they will reduce the costs for shipping the resources over to Britain. Britain also has very busy roads that can cause transport to take much longer and therefore cost more. These reduced costs are clearly advantages to the business therefore giving a good reason to move abroad.
Another good reason for a British based businesses to move abroad is if there is a higher demand for a product (that the business sells or may sell abroad in the future) than there is in Britain. The demand could be higher because of the current fashions and hypes that there are in the country. This would mean the business can be closer to its customers and again reduce costs for moving the products around. Labour availability, costs and training can also be influencing factors for a business to move production overseas. There may be more available staff abroad than in the area of Britain the business is in. Potential staff for business abroad may be able to work for cheaper, reducing the businesses wages and salary costs.
There could also be better or cheaper training of staff where the business may move its production. There are different Laws in different countries that could prove beneficial to a British business if it was to move its production. For example, a law that could benefit a business in the food industry is health and safety regulations, if the rules were more relaxed than in Britain a business can cut back on its regulations and therefore reducing costs. Also in some countries trade unions may be less powerful and in control than they are in Britain so the people running the business can have more control of decisions and actions taken. Another influencing factor is that now days with the Internet, any business can become global and sell products / services to anywhere in the world.
Because the geographical position of an Internet business does not matter so much, the business could move abroad to where premises are cheaper than in Britain. Premises in Britain are well known to be highly priced. Although there are so many factors that may influence a British based business to move abroad, there are however also disadvantages. One of the main disadvantages is that the business may have established themselves in Britain already. For example they may have good relations with their suppliers, customers and staff. They may also have a good reputation for its self, which can always attract new customers to the business.
So if the business was to move abroad they would lose their reputation and good links. Another disadvantage could be that there is an insufficient amount of staff where the business would like to move to. The staff that there is there could also be insufficiently trained to meat the staff requirements of the business and it could prove difficult to get the staff trained to a sufficient level. Another staff issue would be the ability for the staff to get to work everyday. The transport in the new location may be very poor or the staff cannot afford to travel to work everyday. This could prove to be a big problem in the poorer countries.
The move itself over from Britain to the new country may need a lot of funding for moving assets and any staff that are moving with the business. It costs a lot of money to ship things such as large machinery to a different country and this could need a lot of planning for funding this. Also in the time that the business is moving, many sales may be missed out on, and they could lose some business that they had hoped to keep because their customers needed the product or service while they were moving. A final disadvantage is that moving productions to overseas will need a lot of planning. If everything does not run smoothly and there are some problems like delays, then the business will need to have a backup / recovery plan to make up for lost time or anything that has gone wrong. If things do go wrong then this could also cause the business to lose customers.
On the whole, it can be desirable to British based manufacturers to move overseas because of all of the reduced costs. The success of the move all depends on the planning before hand to make sure that the location abroad will provide the manufacturers with what they require, for example trained staff and resources.
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