One shareholder questioned the CEO's rationale for beginning an exploratory effort to establish a new manufacturing plant in India.
The CEO responded by explaining that India was an untapped market with a high demand for products such as those produced by Sterling. His rationale represented an example of which of the following reasons for international expansion?
A) investing in a potentially rewarding relationship with a foreign partner
B) gaining access to lower-cost or better-value factors of production
C) seeking opportunities for growth through market diversification
D) better serving key customers that have relocated abroad
Question 2
Which of the following should be considered first in making the decision to export OTC towels to Canada?
A) What is the probability of OTC and Earth Waves entering into a joint venture?
B) How much fluctuation occurs in the exchange rate between the Canadian dollar and the British pound?
C) What is the likelihood of Earth Waves opening a subsidiary in Canada?
D) What documentation would be required for OTC to export towels to Asia?
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