To Use Location to Build Competitive Advantage When Competing in Both

question 105

Multiple Choice

To use location to build competitive advantage when competing in both domestic and foreign markets,a company must:

• A) scatter its production plants across many different country markets to minimize shipping costs to its distribution centers and/or to wholesalers/retail dealers.
• B) consider (1)whether to concentrate each activity it performs in a few select countries or to disperse performance of the activity to many nations,and (2)in which countries to locate particular activities.
• C) concentrate buyer-related activities in a few well-chosen locations so as to maximize the capture of distribution-related scale economies.
• D) disperse both production and distribution activities across many nations in order to hedge against fluctuating exchange rates and lessen the risks of adverse political developments.
• E) avoid selling in countries where there are high trade barriers or where buyers purchase in small quantities.

Identify and calculate key profitability ratios to assess a company's operational efficiency.

Apply horizontal and vertical analyses to evaluate a company's financial condition and performance over time.

Recognize the importance of market prospect ratios in evaluating a company's future growth and shareholder value.

Understand financial analysis standards for benchmarking that include industry norms, historical data, and leading indicators.

---

Definitions:

Term Insurance Policies

Life insurance policies that provide coverage at a fixed rate of payments for a limited period of time.

Borrowing Capacity

Borrowing capacity is the maximum amount of credit that a person or organization can obtain, determined by lenders based on the borrower’s financial health and credit history.

Outside Funds

Capital sourced from external investors or institutions, outside of the company’s existing financial resources, used for expansion, operations, or investment.

Debt

Money that is owed or due to be paid to someone else, often resulting from loans or credit.