Question

A group of manufacturing organizations purchases raw materials collectively to obtain better deals. This is an example of obtaining competitive advantage by ________.

Answer 1

Answer:

Establishing alliances

Explanation:

A group of manufacturing organizations purchases raw materials collectively to obtain better deals. This is an example of obtaining competitive advantage by establishing alliance. In businesses, alliances are established to maximize profits and increase productivity. Firms also go into alliances to have a more solid hold on the market and achieve competitive advantage of its partners.

In the scenario above, the organizations went into alliances so as to reduce the cost of input purchase and hence increase profits. This is very useful in the case of bulk buying as the cost of logistics is also reduced compared to when they buy individually.