Which strategy involves a company deciding where to locate its operations in order to optimize the use of factors of production?

• A. Market penetration strategy
• B. Site selection strategy
• C. Price leadership strategy
• D. Product differentiation strategy

Answer: (B)

Verified step by step guidance

1. Understand the key terms in the question: The problem asks about a strategy where a company decides the location of its operations to optimize the use of factors of production (land, labor, capital, and entrepreneurship).
2. Recall that 'Market penetration strategy' focuses on increasing sales of existing products in existing markets, not on location decisions.
3. Recognize that 'Price leadership strategy' involves setting prices to influence competitors, unrelated to location or factor optimization.
4. Know that 'Product differentiation strategy' is about making a product stand out from competitors, which does not involve choosing operational locations.
5. Identify that 'Site selection strategy' specifically refers to choosing the location of operations to best utilize factors of production, making it the correct answer.