In 1992,the Enron Development Corporation,a Subsidiary of the Houston-Based Energy

question 54

Multiple Choice

In 1992,the Enron Development Corporation,a subsidiary of the Houston-based energy company,signed a contract to build the largest-ever power plant in India,requiring a total investment of $2.8 billion.After Enron had spent nearly $300 million,the project was canceled by Hindu nationalist politicians in the Maharashtra state where the plant was to be built.Which of the following is true?

• A)Subsequently, Maharashtra invited Enron to renegotiate its contract.
• B)The lack of an effective means of enforcing contracts in a foreign country is clearly a major source of political risk associated with FDI.
• C)In an effort to pressure Maharashtra to reverse its decision, Enron "pushed like hell" the U.S.Energy Department to make a statement in June 1995 to the effect that canceling the Enron deal could adversely affect other power projects.The statement only compounded the situation.The BJP politicians immediately criticized the statement as an attempt by Washington to bully India.
• D)All of the above

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Definitions:

Competitive Edge

A distinct advantage that allows an organization to outperform its competitors.

Cost Leadership

A business strategy aiming to achieve the lowest operational costs within an industry, enabling the company to offer lower prices than competitors and gain market share.

Brand Loyalty

The tendency of consumers to continuously purchase one brand's products over competing ones due to positive experiences and satisfaction.

Differentiation

Refers to the process of distinguishing a product, service, or brand from competitors in ways that appeal to the customer, creating a perceived value over alternatives.