Dispersing particular value chain activities across many countries rather than concentrating them in a select few countries can be more advantageous when
A) buyer-related activities (such as sales,advertising,after-sale service and technical assistance)need to take place close to buyers.
B) high transportation costs make it uneconomical to operate from one or just a few locations.
C) it helps hedge against the risks of exchange rate fluctuations,supply disruptions,and adverse political developments.
D) there are diseconomies of scale in trying to operate from a single location.
E) All of these.

Question

Quizplus · Accepted Answer

All of the given options are valid reasons for dispersing particular value chain activities across many countries rather than concentrating them in select few countries. For example, dispersing buyer-related activities across many countries can help to be closer to the customers, while dispersing production activities across many countries can help to hedge against risks due to exchange rate fluctuations, supply disruptions, and adverse political developments. Similarly, dispersing logistics and distribution activities across many countries can help to reduce transportation costs and avoid diseconomies of scale. Therefore, the best choice is E.

Dispersing Particular Value Chain Activities Across Many Countries Rather Than