Which of the following are two reasons a business should follow an international strategy when exporting and importing?

• A. To increase domestic market share and limit growth
• B. To avoid competition and reduce innovation
• C. To access new markets and diversify risk
• D. To decrease economies of scale and raise production costs

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of an international strategy in business. This strategy involves expanding a company's operations beyond its domestic market to engage in exporting and importing activities.
2. Step 2: Recognize the primary goals of adopting an international strategy. Typically, businesses aim to access new markets, which means reaching more customers outside their home country, thereby increasing potential sales and revenue.
3. Step 3: Consider the benefit of diversifying risk. By operating in multiple countries, a business can reduce its dependence on any single market, which helps protect it from local economic downturns or political instability.
4. Step 4: Evaluate the incorrect options by analyzing their implications. For example, increasing domestic market share is not a direct reason for international strategy since it focuses on foreign markets, and limiting growth contradicts the purpose of expansion.
5. Step 5: Summarize that the two main reasons for following an international strategy when exporting and importing are to access new markets and to diversify risk, which align with the goals of growth and stability in international business.