Suppose that you are a strategic planner for Nike. You observe that shoe manufacturing is extremely labor-intensive, while shoe designing is becoming
Increasingly skill-intensive. If you advise to open a manufacturing-assembly plant
In Vietnam, your decision is an illustration of _____________________ thinking.
A) relative advantage
B) absolute advantage
C) comparative advantage
D) production advantage
E) exploitation advantage

Question

Quizplus · Accepted Answer

This decision is an illustration of comparative advantage thinking because it involves comparing the cost and efficiency of labor-intensive manufacturing in Vietnam versus skill-intensive shoe designing in the company's home country. By opening a manufacturing-assembly plant in Vietnam, Nike can take advantage of the lower labor costs and potentially improve its competitiveness in the market.

Suppose That You Are a Strategic Planner for Nike