In competing in foreign markets, companies find it advantageous to concentrate their activities in a limited number of locations in all of these situations, except when
A)there are significant scale economies in performing an activity.
B)the costs of manufacturing or other activities are significantly lower in some geographic locations than in others.
C)when there is a steep learning or experience curve associated with performing an activity in a single location (thus making it economical to serve the whole world market from just one or maybe a few locations).
D)certain locations have superior resources, allow better coordination of related activities, or offer other valuable advantages.
E)the addition of new production capacity will not adversely impact the supply-demand balance in the local market.

Question

Quizplus · Accepted Answer

Concentrating all activities in a limited number of locations may not be advantageous when the addition of new production capacity will cause an oversupply situation in the local market, disrupting the supply-demand balance. In this situation, it may be more beneficial to establish production facilities in multiple locations to spread the production capacity and better match supply with demand.

In Competing in Foreign Markets, Companies Find It Advantageous to Concentrate