To use location to build competitive advantage, a company that operates transnationally or globally must
A)employ either an export strategy or a franchising strategy.
B)scatter its production plants across many countries in different parts of the world so as to minimize transportation costs.
C)consider whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and consider in which countries to locate particular activities.
D)locate production plants in those countries having suppliers that can supply all the necessary raw materials and components so as to avoid inbound shipping costs.
E)concentrate all of its value chain activities in the one country that has the best combination of low wage rates, low shipping costs, and low tax rates on profits.

Question

Quizplus · Accepted Answer

To use location to build competitive advantage, a company that operates transnationally or globally must consider whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and consider in which countries to locate particular activities. This involves analyzing and comparing various factors such as labor costs, transportation costs, tax rates, supplier availability, and market access to determine the most effective location strategy for each activity. Simply employing an export or franchising strategy (A), scattering production plants across many countries (B), concentrating all activities in one country (E), or locating production plants based on supplier availability (D) may not necessarily lead to competitive advantage and may not take into account all the relevant factors for each activity.

To Use Location to Build Competitive Advantage, a Company That