The Reasons a Company Opts to Expand Outside Its Home

question 18

Multiple Choice

The reasons a company opts to expand outside its home market include

• A) gaining access to new customers for the company's products/services.
• B) spreading its business risk across a wider market base.
• C) achieving lower costs and enhancing the company's competitiveness.
• D) a desire to capitalize on its core competencies and capabilities.
• E) All of these choices are correct.

---

Definitions:

Liability of Foreignness

The challenges and costs associated with operating in a market outside of a company's home country, including cultural differences and unfamiliar regulatory environments.

Import Tariffs

Taxes imposed by a government on goods and services imported into a country, used to control trade and protect domestic industries.

Global Demand

The total demand for a product or service across all countries and regions around the world.

Liability of Foreignness

This concept describes the challenges and additional costs that companies face when entering and operating in foreign markets, as opposed to their home countries.