Evaluate offshoring as a useful strategy for a UK manufacturing business [9]

Overall, it depends on what type of manufacturing business that is deciding to offshore. Is it

a hand made product? If so, they may consider offshoring as it would allow them to reach new
higher skilled workers. With higher skilled workers, it will allow the business to increase productivity.
If the business is able to sell more of its products, then it will be able to benefit from marketing
economies of scale. Therefore, offshoring will be useful. However if the business is mainly machinery
oriented, they may not need to use offshoring because they might have to teach new skills to new
employees, which is pointless because they already have experienced workers, so offshoring won’t
be useful.

Offshoring also depends on where the original business is located and where they will
offshore to. Many manufacturing businesses will offshore to India and also Eastern Europe. In the
short-term, it may increase costs as the business will need to train them. However, the long-term
benefit will outweigh the short-term cost because the wages they will need to pay for those
employees will a lot less compared to an employee within the UK. With lower costs, the business is
more likely to be successful with higher profits. Therefore the business will benefit from offshoring.
However, does the business have ways to communicate to the new employees? The business needs
to ensure these barriers are taken care of so offshoring will be successful.