When a company such as Nike has product designing and development and special material development conducted in the United States and has manufacturing operations in labor-abundant countries like China, the company is using ______________________ strategy.
A)relative advantage
B)absolute advantage
C)production advantage
D)comparative advantage
E)geometric advantage

Question

Quizplus · Accepted Answer

This strategy is known as using a comparative advantage. Nike is leveraging the strengths of different countries—innovation and high-value activities in the US where these capabilities are strong, and manufacturing in countries like China where labor costs are lower, thus each country is producing goods or services at a lower opportunity cost than the other.

When a Company Such as Nike Has Product Designing and Development