International Business: Reasons for Expansion

What type of corporations emerged at resource-rich locations and developed technical capabilities in extracting specific resources?

What drives market-seeking corporations to expand internationally?

Which type of corporations expand internationally to lower their production costs?

What is the primary goal of knowledge-seeking corporations when expanding internationally?

What is a common characteristic of raw material seekers?

Why are natural resources considered a key factor in the expansion of raw material seekers?

What is a key advantage gained by market seekers when they expand internationally?

What type of corporations often engage in the acquisition of foreign firms holding key patents?

Extract, process, and supply resources to global commodity markets for industrial use
Emerged at resource-rich locations, developed technical capabilities, and scaled up extraction
Examples: oil, mining, agriculture, and forest industries
First multinational corporations to emerge in the late 19th and early 20th centuries
Resources cannot be easily substituted, unlike labor, which drives international expansion

Corporations in retailing and distribution expand internationally to achieve economies of scale
Originate from national markets and expand to increase distributional efficiency
Result: large portfolio of goods and valuable brands

Corporations seeking comparative advantages due to competition
Expand internationally to lower production costs, particularly input factors like labor and land
Core goal: remain competitive in manufacturing sectors, such as apparel, furniture, electronics, and mass consumption goods

Corporations expanding internationally to access technology, techniques, or managerial expertise
Goal: increase capacity for innovation, often through acquiring foreign firms holding key patents