An automobile manufacturing company has its production units and sales units in two different locations.The production units are situated in geographical areas that offer cheap labor and easy resource availability.On the other hand, the sales units are located in places where there is a high demand for the products.Which of the following strategies is best exemplified in this scenario?

Question

Quizplus · Accepted Answer

This scenario best exemplifies an arbitrage strategy, which aims to take advantage of differences in cost or price of a product or service in different geographic locations. By locating production units in areas with cheap labor and resources, while keeping sales units in high demand areas, the company can maximize profits by minimizing costs and maximizing sales revenue. This allows the company to take advantage of the benefits offered by different locations to create a competitive advantage.

An Automobile Manufacturing Company Has Its Production Units and Sales