Across Cultural Borders, Demsky 2017 Futura-Core Technologies, an electronics ma

Question

Across Cultural Borders, Demsky 2017

Futura-Core Technologies, an electronics manufacturing firm, has advantages in financial capability and sustainability, but a disadvantage in speed of innovation. It is also at a disadvantage relative to Core-Dynamix Technologies, another electronics manufacturing firm, in important factors such as manufacturing capability and adaptability to market conditions. Which of the following terms best describes Futura-Core's abilities in comparison to Core-Dynamix?

competitive advantage

comparative advantage

absolute advantage

collective bargaining

competitive advantage

comparative advantage

absolute advantage

collective bargaining

Explanation / Answer

B. Comparative advantage.

Competitive advantage is when you have an edge over the competitor which Futura doesn't have over core-dynamix since they are slow in innovation.

Absolute advantage means the ability that let's a company produce more than the competitors with same input which isn't the discussed case here.

Comparative advantage is the case here. Since there's no absolute advantage nor competitive advantage. Comparative advantage for Futura-core because they have financial capability and sustainability which allows them an advantage of producing at a lower cost while their innovation is slow. Hence comparative advantage.

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