Report on the Best Location for a new factory of Dynamic Air Co.

Introduction
Dynamic Air Co. has been operating well for the past 7 years in shoes industry and has an
amazing performance of its Air Sneakers. The success of the loyal customer base and
increasing profit has inspired the director of Dynamic Air Co. – Mr. Robert, to expand the
business in Europe. In order to do that, Mr. Robert has decided to open a new factory in one
of the 3 countries he has in mind. Thus, the purpose of this report is to analyse these 3
countries and recommend the best country for Dynamic Air Co. to set up this new factory.
The priority in choosing this country is based on strategic area and easy recruitment
opportunity. In preparing this report, a survey covering certain factors has been carried out.

Findings
The countries that were surveyed are Country A, Country B, and Country C. The location of
Country A is the near (10 km away) the international airport, while Country C is 5 km away
from the residential area. As for the unemployment rate, Country C has the highest rate
with 40% of the population being unemployed as compared to 35% in Country B, and only
20% in Country C which is the lowest rate among the three countries. Although Country C
has the lowest unemployment rate, it has the highest interest rate charged with 7.8%, and
the lowest is Country B (5.3%). These countries have different numbers of population with
the highest number in Country A (60-80 million people), 120 million in Country B, and 5.7
million people in Country C. Meanwhile, in terms of business taxes, all the 3 countries are
charged based on their annual profits; Country A and Country C share the same charge of
business taxes (18%) while Country B has a lower charge (13%). In the field of labour, there
are only unskilled labours available and they need training in Country A; meanwhile there
are only some unskilled labours in Country B. On the other hand, there are equal division of
skilled and unskilled labours in Country C in which the unskilled labours are used to long
hours working schedule.
Based on comments given, Country B is the most stable country among all the three
countries even though it requires a lot of paperwork for new businesses. Unlike Country B,
Country C is now having small protests from the locals against the new businesses.
Meanwhile, the government policy of Country A requires new businesses to pay 20% for the
service tax for the first 2 years.

Implications
Based on the data collected, Country B is in a strategic area being near to the international
airport. This will greatly help Dynamic Air Co. to minimise costs in travelling of staff and
shipping of goods from our main branch to this new proposed branch. Besides, this location
will also assist the company to be in good ties with other companies who depend on the
airport. Consumers are able to get easy access to the goods produced by the company.
Secondly, Country B has the largest population and consequently will increase the demand
of the products. The new factory will also help to increase the rate of recruitment in Country
B with the job opportunity offered. Due to the fact that Country B has the lowest rate of
interest, this could help the company to increase their sales as people will have to pay only a
small amount of interest. The rate of business taxes for Country B is at the lowest which
resulted in the increasing of the company’s profit. In addition, the new factory will be in
need of new labours in order to operate. Country B has skilled labours but at the same time
there are also some unskilled labours. These unskilled labours can be trained as there only a
small amount of them. This would mean that the company will not need to spend too much
on them but the benefit that they will bring to the company is large. Political stability can
determine the performance of a business. Based on the findings above, Country B is the
most politically stable country. By choosing Country B, we do not have to worry about the
protest or riot that might threaten new businesses. Furthermore, Country B requires new
businesses to prepare a lot of paperwork. As a result, our company would not have many
problems because everything is clearly stated on paper.

Conclusion
It can be seen from the data that Country B would make the best country for our new
factory to be set up due to its strategic location and recruitment opportunity. Setting up the
factory in Country B will benefit our company greatly based on the data presented above.

Recommendation
Taking all the points into consideration, it is strongly recommended for our company to
organise a formal visit to the location and find out if any new rules has been implemented
after this report is done. It would also be best to start looking for suitable training
programmes for unskilled labours to help them perform in our company.