Final answer:
True, businesses with low customer interaction, heavy machinery use, and providing services are known as service factories. They focus on efficiency and cost savings, involving concepts like capital flight and outsourcing to reduce costs.
Step-by-step explanation:
True, companies that have low customer contact, are capital intensive, and provide a service are referred to as service factories. These businesses prioritize efficiency and cost-control within their operations, leveraging heavy machinery, automation, and economies of scale to deliver services. They contrast with high customer contact environments where personalized service is the focus. Capital flight can also pertain to services; a prime illustration is when customer service centers are moved to other countries to reduce costs. Outsourcing is a related concept, where both manufacturing and services like customer support are transferred abroad, often to capitalize on lower labor costs. Industries such as textiles are considered footloose since they can relocate without significant profitability impacts, seeking cheaper labor markets.