Which of the following is a reason for international expansion of a business?
(A) To find new markets
(B) To ensure business efficiency
(C) To maximise competitive risk
(D) To achieve diseconomies of scale - HSC - SSCE Business Studies - Question 3 - 2006 - Paper 1
Question 3
Which of the following is a reason for international expansion of a business?
(A) To find new markets
(B) To ensure business efficiency
(C) To maximise competitiv... show full transcript
Worked Solution & Example Answer:Which of the following is a reason for international expansion of a business?
(A) To find new markets
(B) To ensure business efficiency
(C) To maximise competitive risk
(D) To achieve diseconomies of scale - HSC - SSCE Business Studies - Question 3 - 2006 - Paper 1
Step 1
To find new markets
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Answer
Finding new markets is a primary reason for international expansion. By entering new geographical areas, businesses can increase their customer base and explore new revenue opportunities. This also helps mitigate risks by diversifying market presence.
Step 2
To ensure business efficiency
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Answer
While ensuring business efficiency is important, it is not a direct reason for international expansion. Efficiency typically focuses on internal processes rather than expansion into new markets.
Step 3
To maximise competitive risk
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Answer
Maximising competitive risk is generally not a goal for businesses. Instead, companies seek to reduce risks by expanding into new regions, thus enhancing their competitiveness.
Step 4
To achieve diseconomies of scale
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Answer
Achieving diseconomies of scale is typically avoided by businesses, as it refers to the situation where increased production leads to higher per-unit costs. This is contrary to the goal of expansion.
