To use location to build competitive advantage when competing in both domestic and foreign markets,a company must
A) scatter its production plants across many different country markets so as to minimize the costs of shipping to its own distribution centers and/or to wholesalers/retail dealers.
B) consider (1) whether to concentrate each activity it performs in a few select countries or to disperse performance of the activity to many nations and (2) in which countries to locate particular activities.
C) concentrate buyer-related activities in a few well-chosen locations so as to maximize the capture of distribution-related scale economies.
D) disperse both production and distribution activities across many nations in order to hedge against fluctuating exchange rates and lessen the risks of adverse political developments.
E) avoid selling in countries where there are high trade barriers or where buyers purchase in small quantities.

Question

Quizplus · Accepted Answer

To use location as a competitive advantage in both domestic and foreign markets, a company must consider whether to concentrate each activity it performs in a few select countries or to disperse the activity to many nations, and also decide in which countries to locate particular activities. This is because different countries offer different advantages for different activities, and a company must choose the location that maximizes its competitive advantage. For example, a company may choose to concentrate its research and development activities in a few countries where there is a concentration of research experts and facilities. Similarly, it may choose to locate its manufacturing activities in countries where labor is inexpensive, regulations are favorable, and supply chain costs are low. By making such choices, a company can achieve greater cost efficiencies, differentiation, or both, thereby gaining a competitive advantage.

To Use Location to Build Competitive Advantage When Competing in Both