ACCA Applied Knowledge · Business and Technology · Competitive factors
A manufacturer moves its production to several countries and also designs a standard product sold under one brand worldwide, to gain economies of scale. Which statement about globalisation best fits this strategy?
The best statement is that the strategy exploits global standardisation for economies of scale but may overlook local tastes and regulation. A single brand does not remove currency risk, and local firms remain competitors in each market.
- AIt reduces the firm's exposure to exchange rate movements because all sales use one brand
- BIt exploits global standardisation, but may ignore differences in local tastes and regulationCorrect
- CIt removes the threat of competition from local firms in each market
Explanation
Standardisation brings scale economies and brand consistency, but it risks failing to meet local preferences and rules. A single brand does not remove currency risk, and local competitors remain a threat.
Did you get it right without looking?
One question tells you little. A timed set on Competitive factors shows your real accuracy, how long you take and where you lose marks.
More Competitive factors questions
- A regional bank finds that customers can easily move their accounts to rival banks because the process is free and takes one day. Which of P…
- Which of the following is a recognised criticism of the Boston matrix?
- Which of the following is a barrier to entry that protects existing firms in an industry from new competitors?
- Which of the following is a recognised benefit to an organisation of analysing its activities using the value chain?
- Which of the following best describes the risk of being 'stuck in the middle' in Porter's analysis?
- In Porter's value chain, which of the following is classified as a primary activity?