To Use Location to Build Competitive Advantage When Competing in Both

question 92

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 so as to minimize the costs of shipping to its own 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:

Capacity to Contract

The legal ability of a person to enter into a binding contract, typically requiring that the person is of a certain age and mentally competent.

Ratification

The formal approval or confirmation of an act or agreement, making it officially valid.

Age of Majority

The legally recognized age at which an individual is considered an adult, capable of voting, entering into contracts, and performing other civil duties.

Restitution

A remedy whereby one is able to obtain the return of that which he has given the other party, or an amount of money equivalent to that which he has given the other party.