Podcast
Questions and Answers
Explain how underdeveloped transportation infrastructure can negatively impact a company's production and operating costs when entering a developing country.
Explain how underdeveloped transportation infrastructure can negatively impact a company's production and operating costs when entering a developing country.
Underdeveloped transportation infrastructure leads to increased costs due to delays, unreliable delivery, and the need for alternative, often more expensive, solutions. This includes issues such as awkward entry points, unreliable shipping, incomplete road networks, and limited warehousing.
Why is communication infrastructure, such as reliable internet access and electricity, essential for businesses coordinating production, sales, and distribution in a global market?
Why is communication infrastructure, such as reliable internet access and electricity, essential for businesses coordinating production, sales, and distribution in a global market?
Reliable communication infrastructure enables efficient and real-time coordination of production, sales, and distribution processes. It allows for effective communication between different departments and locations, reducing delays and improving overall operational efficiency.
Describe how Dubai has leveraged its oil revenues to develop its infrastructure and attract foreign direct investment. Provide at least two specific examples.
Describe how Dubai has leveraged its oil revenues to develop its infrastructure and attract foreign direct investment. Provide at least two specific examples.
Dubai has used its oil revenues to develop key infrastructure such as the Jebel Ali Free Trade Zone (an artificial harbour) and Dubai Internet City (an IT hub with tax and regulatory benefits). These developments have attracted foreign businesses and investment.
Explain why a business must identify its infrastructure needs before locating a factory overseas.
Explain why a business must identify its infrastructure needs before locating a factory overseas.
How might limited internet coverage and electricity shortages affect a company's ability to implement efficient coordination between production, sales, and distribution in a developing country?
How might limited internet coverage and electricity shortages affect a company's ability to implement efficient coordination between production, sales, and distribution in a developing country?
Flashcards
Infrastructure
Infrastructure
The basic physical and organizational structures needed for a society or enterprise to operate properly.
Entry Points
Entry Points
Entry points, such as airports and seaports, into a country.
Electricity Shortages
Electricity Shortages
Shortages of electricity that can limit business efficiency.
Free Trade Zone
Free Trade Zone
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Foreign Direct Investment (FDI)
Foreign Direct Investment (FDI)
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Study Notes
- Infrastructure quality is a key factor in deciding to move into a new market.
- A sufficient customer disposable income is important, so goods and services can be delivered to the buyer.
- Communication and transportation links are a vital element in this process.
- Underdeveloped and unreliable transportation infrastructure in developing countries can increase production and operating costs.
- Awkward entry points, unreliable transport, incomplete roads or limited warehousing may contribute to poor infrastructure.
- Poor infrastructure can cause failure to deliver, and lost sales, which makes a market less attractive.
- Coordinating production, sales and distribution is best done electronically.
- Electricity shortages and limited Internet coverage may hinder business efficiency.
- Dubai has used oil sale proceeds to develop its infrastructure.
- Jebel Ali Free Trade Zone is an artificial harbor for ships.
- Dubai Internet City is an IT hub with incentives such as no tax for businesses like IBM, few currency restrictions and limited regulation.
- Dubai Ideas Oasis encourages venture capital and new business start-ups.
- Dubai Knowledge Village looks to improve educational opportunities.
- Hotels, tourist attractions and residential complexes are designed to attract visitors.
- Dubai's infrastructure investment has resulted in a rise in foreign direct investment since 2012.
- Businesses must identify infrastructure needs and whether a country can meet them before locating a factory overseas.
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