To use location to build competitive advantage,a company that operates multinationally 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 (1) whether to concentrate each activity it performs in a few select countries or disperse performance of the activity to many nations and (2) 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 a single country-the one 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 must consider which activities to perform in which countries based on factors such as resource availability, cost structure, and regulatory environment. This involves deciding whether to concentrate activities in a few countries or disperse them across many nations, and which countries to locate particular activities in. This approach is known as a multinational or global strategy, which differs from an export or franchising strategy (choice A), scattering production plants to minimize transportation costs (choice B), locating plants in countries with local suppliers to avoid inbound shipping costs (choice D), or concentrating all activities in a single country based on low wage rates, shipping costs, and tax rates (choice E).

To Use Location to Build Competitive Advantage,a Company That Operates