Question

Montoya Group Inc. is an American firm based in Utah that manufactures and distributes mountaineering equipment such as carabiners, pulleys, harnesses, helmets, ice axes, crampons, etc. In an attempt to lower its production costs, the firm relocates some of its manufacturing facilities to China, which has much lower labor cost.

Montoya Group Inc. uses which of the following strategies?

a. Diversification
b. Exporting
c. Offshoring
d. Licensing
e. Franchising

Answer 1

Answer: Montoya Group Inc uses Offshoring strategy.

Explanation: Offshoring is the act of relocating a business to another country mainly to reduce operational costs.

Montoya Group Inc relocation of its manufacturing facilities to China can be termed Offshoring.