Details of Abroad

Often large corporations need to do business outside of the country they are located in. In some cases, a company may choose to locate a production facility in a separate country from which that product is sold. In other instances, a business may operate in more than one location. Some cases, such as a cruise line, commercial airline, or shipping company, may operate entirely in international space and foreign nations.

Businesses may do this for various reasons, primarily because of labor, tax, and environmental laws. If labor is less costly in one nation, it may be that a company has a production plant in another nation than they market their product in. This is the same for taxes; one nation may have regulations for more favorable taxes than others. This may pose a welcome opportunity for companies to locate in the owner's chosen country. In the same vein, some countries have environmental laws and regulations that are very strict, while others are more lax. If a company may choose where to locate any production facility, finding a nation where regulations are favorable to the business is key.

Example of Abroad

The Sam Doe Corporation is looking to build a new production facility. This facility needed to be spacious, and it would house large mechanical equipment to manufacture car parts. The Sam Doe Corporation realized that the country in which the main office was located did not offer much real estate in the size needed to build the facility. This was in addition to the laws about how the metal used in production was mined.

The Sam Doe corporation began its pursuit abroad. In a neighboring country, the Sam Doe Corporation found a facility that had already been built to house large equipment. All that they needed to do was to exchange the manufacturing machines inside for their own. Besides benefitting the company by offering a premade facility of the correct size, this new nation offered other benefits.

In this nation, labor laws were different. Here workers could work longer days, and there was a larger population of citizens in need of employment. Because of this combination of an excess of workers and a long workday, The Sam Doe Corporation increased productivity by twenty-five percent each year.

Abroad vs. Domestic

Both terms are associated with the location of a business venture. If a company or corporation operates domestically, it exclusively operates within the borders of its home country. By doing business within their country's borders, these companies can closely monitor their market. This is important because it allows for the adjustment of products and services based on consumer feedback.

By the following feedback and abiding by the laws set forth by your country, domestic businesses may gain their consumer's trust more easily. When a company operates by the laws the consumer is familiar with, they know its standards and services. This makes a domestic product a popular choice over a product that comes from overseas.