Scenario 1.1
Canada Proud is a small food processing company located in northern British Columbia. Recently, it has faced pressures from competitors who have been able to produce similar products more cheaply. The owners of Canada Proud are looking into the possibility of starting a branch of the company in Mexico. Trade agreements among countries around the globe help companies like Canada Proud in becoming globally competitive. However, the company is aware that there may be opposition to such a move, especially if it affects the future viability of its current operations.
-Refer to Scenario 1.1. How can setting up a branch in Mexico affect the future viability of Canada Proud's current operations?
A) Trade agreements do not allow companies to run exactly the same operations in two countries.
B) Public pressure in Canada would force the closure of the current operations.
C) The cost advantages in Mexico may lead the company to close its operations in British Columbia.
D) The pressure to manage more than one set of operations is always too much for a single company.

Question

Quizplus · Accepted Answer

The cost advantages in Mexico, such as lower labor and production costs, could make it more economically viable for Canada Proud to concentrate its operations there, potentially leading to the closure of its more expensive operations in British Columbia.

Scenario 1.1 Canada Proud Is a Small Food Processing Company Located in Located