Question

Exxon Mobil enters into a pact with Gazprom, the world's largest natural gas extractor, to set up a processing unit in Baku, Azerbaijan. Which of the following is most likely the reason for Exxon Mobil to opt for this strategic alliance?a. to scale back its core competenciesb. to better compete with Gazpromc. to restrict its factors of productiond. to gain access to low-cost inputs of productione. to gain access to new customers

Answer 1

Answer:

D) To gain access to low-cost inputs of production

Explanation:

Since Gazprom is the world's largest natural gas producer, its operation costs must be relatively low due to economies of scale. Since Exxon Mobile is setting a new plant in Azerbaijan, it will need a large supply of natural gas and the cheaper it is, the better. In this case, Gaxprom provides the raw material and Exxon Mobile processes the materials.