Consider the following scenario and answer the next five questions based on this scenario. Multiple answers may appear to be relevant for each question but select the most appropriate answer. An appropriate answer will be the most specific and accurate choice for the described scenario and the particular question. For every question related to a particular scenario, the same set of five choices will be repeated. Also, no two questions will have the same choice as the correct answer. A Chinese watch manufacturer called WatChina has been selling good quality watches in China for a decade now. Its revenue growth was stagnating and so the firm was evaluating whether it was a good idea for them to start operations in the United States. One of their first steps was to figure out whether China as a country, where they currently operate, provides their industry with certain advantages and disadvantages. The top management team and board members of this firm reached out to various people they knew to figure out these advantages and disadvantages of the Chinese watch industry. They were trying to gauge Porter's diamond of National Advantages. 1. The COO was attending an industry forum, where she had informal chat with some of his competitors who had operations in the US. The COO halfjokingly remarked that the other firms were moving out of China and into the US because they feared WatChina. On a more serious note the COO of WatChina wanted to know whether the local competition was helping or hurting these firms when they went to the US. The COO was trying to understand the ________________ aspect of the Chinese watch industry. A. Factor endowments B. Domestic Demand conditions C. Foreign (US) Demand conditions D. Related and supporting industries E. Firm strategy, structure, & rivalry 2. The CEO reached out to a member of the Central Committee of the Communist Party of China, which is a political body that consists of the top leaders of the Communist Party of China. The CEO wanted to understand whether there were specific aspects in China related to Land, Capital, and Labor that had led to the growth of the watch manufacturing industry. The CEO was trying to understand the ________________ aspect of the Chinese watch industry . A. Factor endowments B. Domestic Demand conditions C. Foreign (US) Demand conditions D. Related and supporting industries E. Firm strategy, structure, & rivalry 3. One of the board members of WatChina was in the US on a holiday and noticed that many of the departmental stores in the US were carrying watches that were Chinese brands. However, there was a considerable number of watch brands which were neither Chinese brands nor manufactured in China. The board member wondered if the domestic demand in the US had any impact on the advancement of the watch industry in China. The board member was trying to understand the ________________ aspect of the Chinese watch industry. A. B. C. D. E. Factor endowments Domestic Demand conditions Foreign (US) Demand conditions Related and supporting industries Firm strategy, structure, & rivalry 4. WatChina's Chief Marketing officer (CMO) was very skeptical about the impact of the demand of the US consumers on the Chinese watch industry. On the other hand, she was intimately familiar with the Chinese consumer and felt that they demanded a very high quality at a very low cost. She wanted to confirm her hunch and so reached out to a friend in a market research agency to better understand the impact of a Chinese consumer on the Chinese watch industry. The CMO was trying to understand the ________________ aspect of the Chinese watch industry. A. Factor endowments B. Domestic Demand conditions C. Foreign (US) Demand conditions D. Related and supporting industries E. Firm strategy, structure, & rivalry 5. The SVP of sourcing had intimate knowledge of every part that went into the manufacturing of the watches. Since its start of operations, this SVP had sensed a huge improvement in the quality of the parts that were sourced locally. In many instances, they were of equal or superior quality to foreign sources parts. Even though WatChina's demand for foreign sourced parts was still significant, the SVP had no doubt that Chinese parts manufacturers were going to steadily replace the foreign parts suppliers. To be certain that his hunch was correct, he commissioned a technical comparison of the quality of the parts that were sourced from China and those sourced from outside. The SVP was trying to understand the ________________ aspect of the Chinese watch industry. A. Factor endowments B. Domestic Demand conditions C. Foreign (US) Demand conditions D. Related and supporting industries E. Firm strategy, structure, & rivalry