Question

Raul is the Chief Operating Officer (COO) of Black Mesa Inc., a firm that produces handcrafted kitchen tables for both the residential and commercial markets. Jose believes that his domestic market is saturated and now wishes to go global. Which of the following below would serve as an advantage for Raul if he chose to pursue international markets?
A. Raul could gain access to cheaper raw materials in a foreign country, thus lowering the cost of his input factors.
B. Raulâs brand might suffer a loss in reputation if he goes global but could increase his market share.
C. Raul could share his intellectual properties with another firm that operates in a foreign country in hopes of achieving collaboration.
D. Raul may benefit from learning about Hofstedeâs cultural dimensions that could be leveraged on his current employees in his domestic market.

Answer 1

Answer: A. Raul could gain access to cheaper raw materials in a foreign country, thus lowering the cost of his input factors.

Explanation:

Being able to produce goods at a lower cost is a good thing for a business because it means that the business can be able to sell at a lower price and therefore get more customers and increase overall profitability.

If Raul could access materials from a foreign company at a cheaper rate, this would be advantageous because his company can produce at a lower price and increase profitability.