Question

Concrete Forms International needs immediate access to steel in order to produce a new product line. It cannot afford to wait and establish a new operation in a foreign country where steel is prevalent, so it decides to purchase an existing company instead. Why did Concrete Forms decide to make this purchase?

Answer 1

Concrete Forms International decided to acquire an existing company to quickly access steel for their new product line, avoiding the time and complexities of setting up a new operation in a foreign country.

Step-by-step explanation:

Concrete Forms International likely decided to purchase an existing company to gain immediate access to steel because building a new operation would take time and may involve complexities such as dealing with factors of production, land costs, and environmental regulations. Purchasing a company in a region where steel is abundant allows for a quicker expansion into the new product line without the delays and potential costs associated with establishing a new factory, dealing with government price controls, or facing tariffs. Additionally, an existing company would already have the necessary infrastructure and supply chains established, which can be crucial for maintaining competitive advantages.

Concrete Forms International decided to purchase an existing company in order to gain immediate access to steel and start producing a new product line. By acquiring an existing company, they can bypass the time-consuming process of establishing a new operation in a foreign country where steel is prevalent. This allows them to meet their production needs quickly and efficiently.