When a company performs a value creation activity in the optimal location for that activity,wherever in the world that might be,it is trying to capitalize on
A) economies of scale.
B) economies of scope.
C) the transnational strategy.
D) location economies.
E) its localization strategy.

Question

Quizplus · Accepted Answer

When a company performs a value creation activity in the optimal location for that activity, it is trying to capitalize on location economies. This means that the company benefits from lower costs, better access to inputs or markets, and enhanced efficiency by locating its operations in a specific geographic area. This is different from economies of scale, which refer to cost advantages from producing more of a product, and economies of scope, which refer to cost advantages from producing multiple products or services using shared resources. A transnational strategy and localization strategy are broader concepts that may involve elements of location economies, but they primarily focus on other aspects of global business operations such as product design, marketing, and organizational structure.

When a Company Performs a Value Creation Activity in the Optimal