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Cost-reduction motives
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Cost-reduction motives

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  • 1.  The strongest incentive for enter a foreign operations. Lower cost labor Less stringent policies in other countries. China and Vietnam.
  • 2. Cheaper shipping costs forunassembled products.Produce in the market to improveits competitiveness and profitmargin.
  • 3.  Look for another market to improve their sales volume and cash flow to invest on research and development.
  • 4.  Incentives of the host government Reduced taxes Low interest loans
  • 5.  The companies have to move their harmful operations to another countries (Africa, Asia and Latin America), because there the environmental protection are less strict.