Dispersed value chains make sense when costs vary across countries.

Question

Quizplus · Accepted Answer

Dispersed value chains involve coordinating and integrating production processes across multiple countries, taking advantage of differences in resources, labor costs, and other factors. If costs vary significantly across countries, it can be more cost-effective to create a dispersed value chain rather than concentrating production in one location. For example, a company might produce raw materials in a low-cost country, assemble components in a mid-cost country, and do final production and distribution in a high-cost country. This approach can help companies reduce costs, increase flexibility, and remain competitive in global markets.

Dispersed Value Chains Make Sense When Costs Vary Across Countries