Site A

Advantages:

 Good communications – easy to transport raw materials to factories and manufactured

goods to the market. There are good connections to the main road which connect the whole
country.
 Low shifting cost as site A is in the same country as their previous site
 Raw materials are easily available so low transportation costs
 Large local market nearby so there is a lot of demand
 Skilled workers are easily available which means that there will be no training costs

Disadvantages:

 Wage rates are high increasing business costs

 Unemployment in this area is low which means it is harder to recruit people
 The rent/taxes of this site are high increasing business costs
 No government grants are available which means the business needs to invest their money
to set up this site
 The port is far away from site A

Site B

Advantages:

 Growing market (helpful in the future)

 Good communications – main roads connect to all parts. Easy transportation of goods
 Ports are nearby – the furniture can be easily exported
 Wage rates are low
 Unemployment is high which means easy recruitment
 Rents/ taxes are low
 Grants are paid by the government

Disadvantages:

 High shifting costs

 Raw materials are not easily available
 Fewer skilled workers

Recommendation: According to our group Site B is a more suitable option. This site has really good
communications there is good connectivity in the country and the ports are nearby too. It has low
labour costs and there is high unemployment in this region which means that it is easier to recruit
people. There are grants provided by the government and the rent of the land is also low, this means
that less money is needed. This extra money can be used in other business costs such as
development of products. Furthermore the business can focus on their main growth area which is
expansion into the foreign markets and if they shift into a country with a potential for high
demand then it would be profitable in the future.
even though few skilled workers are available it does not affect MT Furniture to a large extent as
most of their workers would work in factories to manufacture the furniture so they do not need
to be well-trained as long as they know how to handle the machinery, however training may be
required for this. Due to these reasons we think that site B is the ideal option.

- Aniruddh, Anushka, Dhruti and Srishti