Chapter 8: Location Strategies

Question 1

Clustering refers to companies avoiding each other to reduce competition.

Accepted Answer

False

Question 2

What is the main objective of a location strategy?

Accepted Answer

Maximize the benefit of location to the firm

Question 3

Which type of cost is harder to reduce once a location is chosen?

Accepted Answer

Fixed and location-related costs

Question 4

Once a company chooses a location, it is easy to change it later.

Accepted Answer

False

Question 5

What is one reason location decisions are increasingly global?

Accepted Answer

Access to specialized talent and infrastructure

Question 6

Low wages always lead to lower total costs in a location decision.

Accepted Answer

False

Question 7

Which of the following is a possible ethical challenge in global location decisions?

Accepted Answer

Low wages combined with poor working conditions

Question 8

Which of the following is considered a tangible cost in location strategy?

Accepted Answer

Material costs

Question 9

What does the Ease of Doing Business ranking measure?

Accepted Answer

How easy it is to start and operate a business

Question 10

Why is productivity important when considering low labor costs?

Accepted Answer

Low productivity can increase total costs despite cheap labor

Question 11

Which factor can significantly impact costs due to currency fluctuations?

Accepted Answer

Exchange rates

Questions 11