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Questions and Answers
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?
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What is a common characteristic of raw material seekers?
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Why are natural resources considered a key factor in the expansion of raw material seekers?
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What is a key advantage gained by market seekers when they expand internationally?
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What type of corporations often engage in the acquisition of foreign firms holding key patents?
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Study Notes
Reasons for International Expansion
- Corporations expand internationally due to various reasons, including:
Raw Material Seekers
- 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
Market Seekers
- 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
Low-Cost Seekers
- 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
Knowledge Seekers
- Corporations expanding internationally to access technology, techniques, or managerial expertise
- Goal: increase capacity for innovation, often through acquiring foreign firms holding key patents
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Description
This quiz explores the reasons why corporations choose to expand internationally, including the search for raw materials and strategic growth.
