Question

question #10
when a mid - sized electronics manufacturer in osaka sought to reduce costs, it contracted a vietnamese firm to assemble printed circuit boards. initially, unit prices fell sharply, but the savings masked a subtler shift: the locus of specialized assembly knowledge migrated offshore. within two years, the partner firm had refined assembly protocols to the point where they began offering the same service to the manufacturer’s competitors. although contractual safeguards existed, the osaka company found itself dependent on a supplier whose growing autonomy and diversified client base became an increasing threat to its profitability.
according to the text, what is true about the relationship between the osaka company and its vietnamese partner?
a) the partner firm’s growing technical knowledge, combined with its ability to serve competing clients, placed the manufacturer in a strategically vulnerable position.
b) the manufacturer’s reliance on its partner decreased over time since operational expertise and production did not migrate offshore.
c) the manufacturer’s outsourcing arrangement secured lower costs without significantly affecting its control over specialized production knowledge.
d) the partner firm’s refinement of assembly processes ultimately benefited the manufacturer by ensuring exclusive access to high - quality production services.

Explanation:

The text states the partner firm refined assembly protocols (gained technical knowledge) and began serving competitors. The Osaka company became dependent on the supplier, with the partner’s autonomy and diversified clients threatening its profitability—matching option A’s description of strategic vulnerability. Option B is false (dependence increased); option C is false (control over specialized knowledge was affected as the partner gained expertise); option D is false (the partner did not ensure exclusive access, instead serving competitors).

Answer:

A) The partner firm’s growing technical knowledge, combined with its ability to serve competing clients, placed the manufacturer in a strategically vulnerable position.