Factors when assessing production location

Costs of production - businesses want to keep production costs low as this can help increase their profit margin or allow them to sell at a lower price and gain a competitive advantage

Skills and availability of labour force - the quality of the workforce is important as this will directly impact the quality of the goods and services produced. Also the business may choose to locate the production in a market where the labour costs are lower

Infrastructure - businesses need to consider the infrastructure needed such as roads as this will affect the production process

Location in a trading bloc - a business located in a market within a trade bloc will be able to access many advantages such as reduced protectionist measures(government policies that restrict international trade in order to protect domestic industries)

Return on investments - assessing the return on investment in different markets will reduce the risk of the initial investment not being paid for

Natural resources - it’s often important that a business has easy access to their raw materials as this can help reduce transportation costs and help reduce any potential delays to the production process

Political stability - businesses may be at risk of not gaining a return on their investment in a country with political instability. A country with a stable economy and government is seen as less risky investment for a business

Ease of doing business - a business will want to locate in an area where there is limited bureaucracy(an organisation or system where many rules and process exist that slow down decision making), so the process of establishing production facilities isn’t delayed or doesn’t incur high costs

Government incentives - businesses may be offered incentives (e.g. grants, business loans and tax breaks) by the government