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Author Question: In a short essay, discuss three reasons that firms often seek new market opportunities. What will ... (Read 132 times)

Frost2351

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on: Jul 7, 2018
In a short essay, discuss three reasons that firms often seek new market opportunities.
 
  What will be an ideal response?

Question 2

What are three efficiency-related motives that focal firms might have for internationalizing through FDI? Explain your answer in a short essay.
 
  What will be an ideal response?


enass

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Reply #1 on: Jul 7, 2018
Answer to Question 1

a. Gain access to new markets or opportunitiesThe existence of a substantial market motivates many firms to produce offerings at or near customer locations. Local production improves customer service and reduces costs of transporting goods to buyer locations.
b. Follow key customersFirms often follow their key customers abroad to preempt other vendors from servicing them. This is especially true of firms that generate much of their sales from large-scale industrial customers. Establishing local operations positions the firm to better serve customer needs.
c. Compete with key rivals in their own marketsSome MNEs may choose to confront current or potential competitors directly, in the competitors' home market. The strategic purpose is to weaken the competitor by forcing it to expend resources to defend its market.

Answer to Question 2

This is great. Thanks


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