Which of the following is a primary reason a firm might decide to globalize its business?

• A. To access new markets and increase potential sales
• B. To avoid all forms of competition
• C. To reduce the quality of its products
• D. To limit its exposure to international regulations

Answer: (A)

Verified step by step guidance

1. Understand the concept of globalization in a business context: it refers to a firm's decision to expand its operations beyond domestic borders to operate in international markets.
2. Identify the main motivations for a firm to globalize, which typically include accessing new customer bases, increasing sales potential, achieving economies of scale, and gaining competitive advantages.
3. Evaluate each option by considering whether it aligns with these motivations. For example, 'To access new markets and increase potential sales' directly relates to expanding customer reach and revenue opportunities.
4. Recognize that avoiding all forms of competition is unrealistic because globalization often increases competition rather than eliminates it.
5. Understand that reducing product quality or limiting exposure to international regulations are generally not primary reasons for globalization, as firms usually aim to maintain or improve quality and must comply with regulations to operate internationally.