When Fun Bun Inc.,an international fast-food chain,first moved into China,it had to teach farmers how to grow a particular variety of potatoes,and bakers had to be taught how to make hamburger buns.This is an example of:
A) corporate social responsibility.
B) an undeveloped supply channel.
C) incumbent inertia.
D) monopoly rents.

Question

Quizplus · Accepted Answer

This is an example of an undeveloped supply channel, as Fun Bun Inc. had to teach farmers and bakers in China how to produce the ingredients needed for their menu. This indicates a lack of established suppliers in the region. Corporate social responsibility pertains to ethical business practices, while incumbent inertia refers to established companies being resistant to change. Monopoly rents indicate a company benefiting from being the sole supplier in a market.