Audio Component Outsourcing (Scenario)

Multiple Choice

Audio Component Outsourcing (Scenario)
Echo Corp., a company based in Boston, manufactures high-quality audio components, such as speakers, amplifiers, and receivers for home entertainment systems. Echo has been losing market share in recent years due to the competitive pricing of other audio component manufacturers that engage in global sourcing. Echo managers are attempting to convince Nathan Douglas, the firm's founder and CEO, that global sourcing would enable the firm to be more competitive without sacrificing quality.
-The strategic view of global sourcing suggests that ________.

A) just as firms achieve gains in efficiency, productivity, quality, and revenues by leveraging offshore talent, they also obtain the means to turn around failing businesses, speed up innovation, restructure operations, and fund otherwise-unaffordable development projects
B) firms that procure supplies from foreign subsidiaries are more likely than not to lose ground to competitors who primarily bank on their own resources
C) a strong legal environment is not the prerequisite for increasing efficiencies by relocating strategic operations abroad
D) the firms' innovative activities tend to make mature products obsolete over time