Which of the following is most likely to be the advantage of locating a value creation activity in the optimal location for that activity?
A)It increases the costs of value creation.
B)It decreases consumer surplus.
C)It helps the firm to achieve a high-cost position.
D)It nullifies all trade barriers.
E)It enables a firm to differentiate its product offering from those of competitors.

Question

Quizplus · Accepted Answer

Locating a value creation activity in the optimal location for that activity could enable a firm to differentiate its product offering from those of competitors. For example, if a firm locates its manufacturing activity in a region with abundant raw materials and low labor costs, it may be able to produce its products at a lower cost compared to competitors who locate in regions with higher costs. This could enable the firm to offer its products at a lower price or to invest the cost savings in product differentiation, such as higher quality or unique features.

Which of the Following Is Most Likely to Be the Advantage