December 2013 #1 Part C

Hello…

Is this right? I find it a bit off from the examiner’s answers.

Factor conditions
Does the country in which a firm is trying to locate have a good supply of labour, materials and infrastructure?
At Ceeland, the government has spent the last decade building an effective road transport system. This will be beneficial to MachineShop as it can result in inventory from suppliers being received faster as well as deliveries being made to customers faster.

The government also introduced low fuel and road taxes and this would also contribute positively to MachineShop as they will be able to operate at a significantly lower cost and thus better profitability.

The government has also introduced broadband internet access to the entire country of Ceeland. This will also benefit MachineShop because they can now sell to the entire country as opposed to just being limited to sales from the people who live nearby the organisation.

Demand conditions
This relates to the demand for the goods and services provided by an organisation.

Before the new government was elected, there were restrictions on the type of machines which could have been sold and used by domestic customers. However, this was changed and there is no longer a limitation on the type of machines which can be sold to domestic customers. This will have a positive impact on MachineShop because they can now sell all of the various ranges of products which they sold in their homeland (Arboria).

Related and supported industries
For example, in the tourism industry related and supported industries would include hotels, airlines, agriculture and restaurants.

In the case study there isn’t much evidence relating to related and supported industries.

Firm strategy, structure and rivalry
If FRG is not successfully acquired by Dave, then this would be the only source of competition he will face in Ceeland. This will negatively impact MachineShop because FRG is an established supplier of large machine tools to trade customers with an effective distribution network and an experienced sales team. MachineShop would not have any trade customers there in Ceeland until they establish themselves properly and also in their homeland (Arboria); only 35% of their sales are from trade customers. This may also suggest that most of MachineShop success is from domestic customers.

The decision to remove the requirement for having a Ceeland citizen on the board and being registered in Ceeland in order to operate will positively impact on MachineShop because if they were to locate in Ceeland, the original composition of the board and the owners of the company would still remain the same and avoid conflicts and tensions between the directors.

If this enough to write to pass?

Thanks!