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.

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Definitions:

Required for Production

Required for production denotes the essential resources, materials, labor, and capacity needed to manufacture a product or carry out a production process.

Budgeted Selling Price

The projected price at which a company expects to sell its goods or services in the market during a specific period.

Master Budget

A comprehensive financial planning document that combines several individual budgets within a company, forecasting overall financial activities.

Credit Sales

Sales for which payment is not received at the time of transaction but is postponed to a future date, often involving terms of credit.