12 Do you think AHP should relocate its factories to a low-cost country in Asia? Justify your answer. [6]

[BASEL Moderator]

AHP is a multinational company. It makes mobile (cell) phones in Europe in country X. 80% of its sales are in Europe. Some people are concerned about AHP’s impact on the environment. The 4 Operations Director said: ‘AHP always tries to ensure it meets all legal controls. Globalisation has created many opportunities for AHP and its stakeholders. The Operations Director is planning to relocate its factories to a low-cost country in Asia. Raw materials would need to be transported an extra 4000kms. Interest rates are likely to increase across Europe.

12 Do you think AHP should relocate its factories to a low-cost country in Asia? Justify your answer. [6]

Possible KN Points:
• Further to reach its market
• Availability of suitable land
• Availability of suitable labour
• Distance to raw materials
• Negative reaction of local community