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MKT 471 Exam #2 Essay Questions

MKT 471 Exam #2 Essay Questions - Dustin Johnston MKT/MGT...

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Dustin Johnston July 2, 2010 MKT/MGT 471 Dr. Newbold MKT 471 Exam 2: Essay Questions 1. Explain the business reasons why firms engage in international expansion. -Firms have a plethora of reasons to enter and expand their international markets. Companies such as McDonalds, Microsoft, Coke Cola, and Wal-Mart are all excellent examples of international companies that have prospered from going into new markets. The businesses that have been harmed the most by entering these locations are typically “mom and pop” stores, local or regional stores that feel safe in the market that they are currently in. If they don’t their competitors will. To lower prices through economies of scale Break into a new market There may be tax incentives in other markets There may be a lower cost of labor or supplies in other markets Prolong the life cycle of your existing products (maturity or decline stage) Similar technologies -Today’s firms truly have no choice but to compete in an international market place, one of the biggest driving forces is that if they don’t enter the global market place the will surely fail because without a doubt one of their competitors will. This will allow their competitors to not only decrease their costs (through economies of scale, lower costs of labor and supplies, and perhaps even tax incentives provided by foreign governments but also higher profits because of increased market size, a prolonged product life cycle, and new ideas from an increasingly diverse workforce.
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