Which of the following is an advantage of exporting?
A)It allows focal firms to attain maximum control by establishing ownership of key assets in the foreign market.
B)It is a high-control strategy that requires substantial resource commitment when compared to equity joint ventures.
C)It minimizes exposure to tariffs and other trade barriers, as well as fluctuations in exchange rates.
D)It increases overall sales volume, improves market share, and reduces per-unit costs of manufacturing.

Question

Quizplus · Accepted Answer

Exporting allows firms to increase overall sales volume by reaching new markets, improve market share by competing with local players, and reduce per-unit costs of manufacturing by producing in larger quantities. This can lead to economies of scale and increased profitability for the firm. While some risks such as exposure to trade barriers and fluctuations in exchange rates exist, these can be managed through proper planning and risk management strategies. Option A describes a strategy for internationalization that involves a high degree of control, but this is not necessarily an advantage of exporting. Option B is incorrect as exporting typically requires less resource commitment than equity joint ventures.

Which of the Following Is an Advantage of Exporting