Which are cost advantages from performing a value creation activity in the optimal location for that activity wherever in the world that might be?

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What are the two ways a firm can create more value for its products?
When a company focuses on increasing its profitability by reaping cost reductions that come from economies of scale and location economies it is using a N ):?
What are the four main strategic postures that firms can use when competing globally?
What strategy is making sense when the firm faces strong pressures for cost reductions and demands for local responsiveness are minimal?

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The operations of a firm can be thought of as a value chain composed of a series of distinct value creation activities, including production, marketing and sales, materials management, R&D, human resources, information systems, and the firm infrastructure. We can categorize these value creation activities, or operations, as primary activities and support activities

Primary activities: Primary activities have to do with the design, creation, and delivery of the product; its marketing; and its support and after-sale service.

Support activities: The support activities of the value chain provide inputs that allow the primary activities to occur. In terms of attaining a competitive advantage, support activities can be as important as, if not more important than, the primary activities of the firm.

- Cost drivers: In competitive global markets, international businesses often face opportunities for cost reductions. Responding to pressures for cost reduction requires a firm to try to lower the costs of value creation. A manufacturer, for example, might mass-produce a standardized product at the optimal location in the world, wherever that might be, to realize economies of scale, learning effects, and location economies. Alternatively, a firm might outsource certain functions to low-cost foreign suppliers in an attempt to reduce costs.

- Market globalization drivers: Pressures for cost reduction can be particularly intense in industries producing commodity-type products where meaningful differentiation on nonprice factors is difficult and price is the main competitive weapon. This tends to be the case for products that serve universal needs. Universal needs exist when the tastes and preferences of consumers in different nations are similar if not identical.

- Competitive drivers: The liberalization of the world trade and investment environment in recent decades, by facilitating greater international competition, has generally increased cost pressures.

- Pressures for local responsiveness arise from national differences in consumer tastes and preferences, infrastructure, accepted business practices, and distribution channels, and from host-government demands. Responding to pressures to be locally responsive requires a firm to differentiate its products and marketing strategy from country to country to accommodate these factors, all of which tends to raise the firm's cost structure.

- This can be due to historic or cultural reasons.

- This arises also from differences in infrastructure or traditional practices among countries, creating a need to customize products accordingly. Fulfilling this need may require the delegation of manufacturing and production functions to foreign subsidiaries. For example, in North America, consumer electrical systems are based on 110 volts, whereas in some European countries, 240-volt systems are standard.

- A firm's marketing strategies may have to be responsive to differences in distribution channels among countries, which may necessitate the delegation of marketing functions to national subsidiaries.

- Threats of protectionism, economic nationalism, and local content rules (which require that a certain percentage of a product should be manufactured locally) dictate that international businesses manufacture locally.

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What are the two ways a firm can create more value for its products?

You can generate more value by applying one of three strategies: You can keep the purchase price the same and deliver more with every purchase; you can lower the purchase price and deliver the same quantity of value; or you can do both.

When a company focuses on increasing its profitability by reaping cost reductions that come from economies of scale and location economies it is using a N ):?

Firms that pursue a global standardization strategy focus on increasing profitability and profit growth by reaping the cost reductions that come from economies of scale, learning effects, and location economies; that is, their strategic goal is to pursue a low-cost strategy on a global scale. 24.

What are the four main strategic postures that firms can use when competing globally?

Firms typically choose among four main strategic postures when competing internationally. These can be characterized as a global standardization strategy, a localization strategy, a transnational strategy, and an international strategy.

What strategy is making sense when the firm faces strong pressures for cost reductions and demands for local responsiveness are minimal?

Which strategy makes most sense when there are strong pressures for cost reductions and minimal demands for local responsiveness? Global standardization strategy.