When a company such as Nike has product designing and development and special material development conducted in the United States and has manufacturing
Operations in labor-abundant countries like China, the company is using
______________________ strategy.
A) relative advantage
B) absolute advantage
C) production advantage
D) comparative advantage
E) geometric advantage

Question

Quizplus · Accepted Answer

Nike is using comparative advantage strategy, which involves specializing in producing the goods or services in which the country has a lower opportunity cost of production, and trade with other countries. In this case, the US specializes in product designing and development and special material development, while China has a labor-abundant workforce, making it more cost-efficient to manufacture products there.

When a Company Such as Nike Has Product Designing and Development