Question

question 12

businesses seek to make a profit and reduce costs to achieve that profit.

making something in one country and shipping it to another, even if they could make it in the destination country at a higher cost, is an example of primarily what concept?

quality and efficiency
technology
advances in finances and budgets
international competition

Explanation:

Analyze the business scenario

The prompt describes a scenario where a business makes a product in one country and ships it to another country. This decision is made even though the product could be manufactured in the destination country, because doing so locally would incur a higher cost. The core motivation is to reduce costs and maximize the Role of Profit.

Evaluate the options

• Quality and efficiency: While reducing costs is related to efficiency, the specific act of cross-border manufacturing and shipping to leverage lower production costs is a strategic response to global market dynamics.
• Technology: Technology may facilitate this process, but it is not the primary concept illustrated by shifting production to lower-cost nations.
• Advances in finances and budgets: This refers to internal financial management rather than global sourcing strategies.
• International competition: Producing goods in lower-cost countries to remain competitive in a global market is a primary driver of international trade and competition. This aligns with External Business Awareness regarding global cost structures.

Determine the correct concept

By manufacturing where costs are lower and shipping to the destination market, the business is navigating global cost differences to maintain its competitive edge. This strategy is a direct response to international competition and global cost advantages.

Answer:

• Quality and efficiency
• Technology
• Advances in finances and budgets
• International competition (Correct answer)