Which of the Following Is an Advantage to Exporting Goods

question 35

Multiple Choice

Which of the following is an advantage to exporting goods to reach international markets rather than entering into some form of FDI?

• A) fewer agency costs
• B) fewer direct advantages from research and development
• C) a greater risk of losing markets to copycat goods producers
• D) an inability to exploit R&D as effectively as if also invested abroad

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Definitions:

Unrelated Diversification

A corporate strategy where a company expands into areas or industries that are not related to its current business or products.

New Businesses

Enterprises that have been recently established and are in the early stages of operation.

Concentration Strategy

A strategy in which a company focuses its resources on entering or expanding in a narrow market or industry segment.

Expansion

The process of increasing the size, scope, or scale of operations of a business or organization, often into new markets or areas.