In a short essay, discuss three reasons that firms often seek new market opportunities
What will be an ideal response?
a. Gain access to new markets or opportunities—The existence of a substantial market motivates many firms to produce offerings at or near customer locations. Local production improves customer service and reduces costs of transporting goods to buyer locations.
b. Follow key customers—Firms often follow their key customers abroad to preempt other vendors from servicing them. This is especially true of firms that generate much of their sales from large-scale industrial customers. Establishing local operations positions the firm to better serve customer needs.
c. Compete with key rivals in their own markets—Some MNEs may choose to confront current or potential competitors directly, in the competitors' home market. The strategic purpose is to weaken the competitor by forcing it to expend resources to defend its market.
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Lisa has $1,000 in cash today. Which one of the following investment options is most apt to double her money?
A) 6 percent interest for 3 years B) 12 percent interest for 5 years C) 7 percent interest for 9 years D) 8 percent interest for 9 years E) 6 percent interest for 10 years
Pippen Co. recorded operating data for its shoe division for the year. The company's desired return is 5%.
Sales $1,000,000 Contribution margin 200,000 Total direct fixed costs 120,000 Average total operating assets 400,000 Which one of the following reflects the controllable margin for the year? a) $80,000 b) $60,000 c) 20% d) 50%