Suppose that you are a strategic planner for Nike.You observe that shoe manufacturing is extremely labor-intensive, while shoe designing is becoming increasingly skill-intensive.If you advise to open a manufacturing-assembly plant in Vietnam, your decision is an illustration of _____________________ thinking.
A)relative advantage
B)absolute advantage
C)comparative advantage
D)production advantage
E)exploitation advantage

Question

Quizplus · Accepted Answer

Comparative advantage refers to the ability of a party to produce a particular good or service at a lower opportunity cost than another. In this scenario, choosing Vietnam for its labor-intensive manufacturing capabilities suggests leveraging Vietnam's comparative advantage in lower-cost labor for manufacturing, while likely retaining the skill-intensive designing aspect in a location with a comparative advantage in skilled labor.

Suppose That You Are a Strategic Planner for Nike