As Firms Expand into Foreign Markets,they Generally Follow a Pattern

question 42

Multiple Choice

As firms expand into foreign markets,they generally follow a pattern of change in structure that parallels the changes in their strategies.Which one of the following is not a major contingency that influences the structure they choose?

• A) the type of strategy that is driving the company foreign operations
• B) the research and development budget commitment
• C) product diversity
• D) the extent of the company dependence on foreign sales

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Definitions:

Explicit Costs

Direct, out-of-pocket payments for wages, rent, materials, and other inputs required for the production of goods or services.

Implicit Costs

The opportunity costs of utilizing resources owned by the firm that could have been employed elsewhere, not directly paid out in cash.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, leading to a decreased cost per unit.

Pin Factory

An example used by Adam Smith to describe the benefits of specialization and division of labor in manufacturing, increasing productivity and efficiency.