Question

Which of the following are sound business reasons U.S. and foreign companies expand internationally? Check all that apply.

a. The desire for the company to sound more important and powerful than would be the case if the company only operated domestically
b. The desire to create an organization that is easier to operate and manage than a business that operates solely within the borders of one country
c. The desire to enter new markets and engage with new customers
d. The desire to relocate to places where the firm's costs of production will be higher

Answer 1

U.S. and foreign companies expand internationally primarily to enter new markets and engage with new customers, which can lead to increased revenues, economies of scale, and competitive advantages. Companies usually do not expand internationally with the intention of increasing production costs.

Step-by-step explanation:

U.S. and foreign companies expand internationally for several sound business reasons. These include c. the desire to enter new markets and engage with new customers, allowing firms to increase their customer base and revenue. International trade can open up opportunities for economies of scale, enhancing competitive advantage and access to a variety of goods for consumers. It also allows businesses to specialize in production, with the potential to access cheaper resources and labor. Furthermore, international expansion can help companies to diversify their market risk and tap into emerging markets. However, d. the desire to relocate to places where the firm's costs of production will be higher is not typically a sound business reason for expansion. It is more common for businesses to seek locations where production costs are lower to maximize profits.