To Use Location to Build Competitive Advantage,a Company That Operates

question 83

Multiple Choice

To use location to build competitive advantage,a company that operates multinationally 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 (1) whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and (2) 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 a single country-the one that has the best combination of low wage rates, low shipping costs, and low tax rates on profits.

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Definitions:

Poison Pill

A corporate tactic to avoid being acquired. A poison pill is a clause written into a firm’s bylaws that makes it prohibitively expensive for an acquiring firm to take control.

Takeover Attempt

A bid by a company or investor to acquire control of another company, often by purchasing a substantial portion of its stock.

White Knight

A friendly investor or company that acquires a firm at risk of a hostile takeover, often viewed as a more favorable option by the target company's management.

Bonds

Fixed-income securities that represent a loan made by an investor to a borrower, typically corporate or governmental, which includes terms for variable or fixed interest payments and the return of the original investment at maturity.