To Use Location to Build Competitive Advantage, a Company That

question 86

Multiple Choice

To use location to build competitive advantage, a company that operates transnationally or globally must

• A)employ either an export strategy or a franchising strategy.
• B)scatter its production plants across many countries in different parts of the world so as to minimize transportation costs.
• C)consider whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and consider in which countries to locate particular activities.
• D)locate production plants in those countries having suppliers that can supply all the necessary raw materials and components so as to avoid inbound shipping costs.
• E)concentrate all of its value chain activities in the one country that has the best combination of low wage rates, low shipping costs, and low tax rates on profits.

---

Definitions:

Leached

Leached describes the process by which soluble nutrients or chemicals are washed out of soil or materials due to the movement of water.

Tropical Climate

A non-arid climate characterized by consistent high temperatures throughout the year, usually found within 23.5 degrees north or south of the equator.

Organic Debris

Organic matter, such as leaves, twigs, and other plant or animal material, that has accumulated in a natural environment.

Calcium Carbonate

A chemical compound with the formula CaCO3, commonly found in rocks as the minerals calcite and aragonite and is the main component of pearls and the shells of marine organisms.