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Dispersing particular value chain activities

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Dispersing particular value chain activities across many countries rather than concentrating them in a select few countries can be more advantageous, except when

-buyer-related activities (such as sales, advertising, after-sale service, and technical assistance) need to take place close to buyers.

-buyers' demand for short delivery times and/or high transportation costs make it uneconomical to operate from one or just a few locations.

-it helps hedge against the risks of exchange rate fluctuations, supply disruptions, and adverse political developments.

-there are diseconomies of scale in trying to operate from a single location.

-there are reasons to decouple buyer-related activities in favor of locational advantages.

Reference no: EM132670858

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