Why Do Companies Decide to Enter a Foreign Market

question 40

Multiple Choice

Why do companies decide to enter a foreign market?

• A)to capture economies of scale in product development, manufacturing, or marketing
• B)to raise input costs through greater pooled purchasing power
• C)to decrease the rate at which they accumulate experience and move up the learning curve
• D)to concentrate risk within a broader base of countries, especially when sales are down in one area and the company can undermine sales elsewhere
• E)to exploit the natural resources found within its home market

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Definitions:

Money Supply

The sum of all funds available in an economy, including cash, coins, and checking and savings account balances, at a particular point in time.

Foreign Exports

Products or services that are manufactured in one nation and purchased by consumers in a different country.

Say's Law

Say's Law, also known as the law of markets, is an economic principle which suggests that production creates its own demand, positing that a supply of goods will ultimately lead to the creation of an equivalent demand.

Demand Prices

Prices of goods and services determined by the demand for them, often influenced by consumers' willingness and ability to pay.