Lindux Co.,intends to enhance its competitive advantage by exploiting the national differences that prevail in the countries that host its subsidiaries.Which of the following is consistent with this intention?
A) moving the manufacture of labor-intensive components to Vietnam in order to capitalize on the lower cost labor found in Vietnam.
B) hiring local managers for its foreign subsidiaries rather than employing expatriates.
C) centralizing the company's R&D activities in the home country for reasons of strategic security.
D) using a common distribution channel for multiple products.

Question

Quizplus · Accepted Answer

Locating manufacture of labor-intensive components in Vietnam,a country well-known for its low labor-cost provides Lindux Co.with competitive advantage which is the result of inter-country differences in factor costs.The difference between a local and expatriate manager is valid for every home and host country regardless of the differences or similarities they may have.Therefore,choice b cannot be the right answer.Also,centralizing the company's R&D activities in the home country for reasons of strategic security choice c is not relevant to inter-country differences.Finally,a common distribution channel is a means of achieving scope economies which is independent of inter-country differences.

Lindux Co,Intends to Enhance Its Competitive Advantage by Exploiting the National