Cost cutting in international operations can take place because of: –
The cost of doing business abroad is higher than the cost of doing business domestically. Export prices are lower, but import prices are higher. – Local wages and benefits are higher.
There may be a shortage or lack of skilled labor in some locations. – Taxes and other government requirements make it more expensive to operate abroad.
A lack of infrastructure, or the cost is prohibitive. – Foreign currency conversion losses result from fluctuations in exchange rates.
Depending on what your business needs are and where you’re located, there may be many other things to consider. Keep reading for a list of eight strategies that can help reduce international operations costs:
Researching prices around the world before setting up an overseas office or production facility can save time and money as well as avoid unnecessarily high operating expenses by identifying the most competitive locations.
This saves not only years of research but also reduces mistakes like choosing a location with higher labor wages than needed because it happens to have more skilled workers available locally at any given moment than similar nearby cities do.” Researching prices around the