Question

Swift Inc., a French footwear manufacturer, opened a new outlet in Thailand. Swift Inc. soon found substantial differences in the costs incurred in the host country. The firm shifted production to Thailand which resulted in lower labor costs, lower transport costs, and lower raw material costs. The benefits gained by the footwear manufacturer are attributed to which of the following external factors?

a. Market factors
b. Environmental factors
c. Economic factors
d. Competitive factors

Answer 1

Answer:

Therefore, option C - economic factors, is the correct option.

Explanation:

Economic factors include rising product development costs, economies of scale in manufacturing and distribution, worldwide sourcing efficiency, steep learning curves, and significant differences in host-country costs.

The benefits gained by Swift Inc. relates to the economic factor of significant differences in the cost of the host country, Thailand.

Therefore, option C - economic factors, is the correct option.