GMS401 WEEK 2 EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED
Vertical Integration
when a company owns or controls its suppliers, distributers, or retail locations to control its value or
supply chain
6 Reasons to Globalize
1. Reduce costs (labour, taxes, tariffs, etc.)
2. Improve the supply chain
3. Provide better goods and services
4. Understand markets
5. Learn to improve operations
6. Attract and retain global talent
Many international operations seek to take advantage of the tangible opportunities to reduce their
costs..
- Foreign locations with lower wages can help lower both direct and indirect costs
- Less stringent government regulations on a wide variety of operations practices (environmental control,
health and safety, etc.) reduce costs
- Opportunities to cut cost of taxes and tariffs also encourage foreign operations
Maquiladoras
, Mexican factories located along the U.S./Mexico border the receive preferential tariff treatment
Advantages of shifting low-skill jobs to another country
- Firm may reduce costs
- Frees higher cost workers for more valuable tasks
- Reducing wage cost allows the savings to be invested in improved product and facilities at the home
location
Trade agreements that helped reduce tariffs
WTO, USMCA, EU
World Trade Organization (WTO)
an international organization that promotes world trade by lowering barriers to the free flow of goods
across borders
USMCA
free trade agreement between Canada, Mexico, and the United States
European Union (EU)
a European trade group that has 28 member states as of 2015
Improve Supply Chain
Supply chain can be improved by locating facilities in countries where unique resources are available.
These resources made the expertise, labour, or raw materials.
Provide Better Goods and Services
COMPLETE SOLUTIONS VERIFIED
Vertical Integration
when a company owns or controls its suppliers, distributers, or retail locations to control its value or
supply chain
6 Reasons to Globalize
1. Reduce costs (labour, taxes, tariffs, etc.)
2. Improve the supply chain
3. Provide better goods and services
4. Understand markets
5. Learn to improve operations
6. Attract and retain global talent
Many international operations seek to take advantage of the tangible opportunities to reduce their
costs..
- Foreign locations with lower wages can help lower both direct and indirect costs
- Less stringent government regulations on a wide variety of operations practices (environmental control,
health and safety, etc.) reduce costs
- Opportunities to cut cost of taxes and tariffs also encourage foreign operations
Maquiladoras
, Mexican factories located along the U.S./Mexico border the receive preferential tariff treatment
Advantages of shifting low-skill jobs to another country
- Firm may reduce costs
- Frees higher cost workers for more valuable tasks
- Reducing wage cost allows the savings to be invested in improved product and facilities at the home
location
Trade agreements that helped reduce tariffs
WTO, USMCA, EU
World Trade Organization (WTO)
an international organization that promotes world trade by lowering barriers to the free flow of goods
across borders
USMCA
free trade agreement between Canada, Mexico, and the United States
European Union (EU)
a European trade group that has 28 member states as of 2015
Improve Supply Chain
Supply chain can be improved by locating facilities in countries where unique resources are available.
These resources made the expertise, labour, or raw materials.
Provide Better Goods and Services
