Why do companies decide to enter a foreign market?

• A. To access new customers and increase sales revenue
• B. To reduce their production costs to zero
• C. To avoid all forms of competition
• D. To eliminate the need for marketing

Answer: (A)

Verified step by step guidance

1. Understand the primary motivations behind companies entering foreign markets, which typically involve strategic business goals rather than unrealistic or impossible outcomes.
2. Recognize that companies enter foreign markets mainly to expand their customer base, which can lead to increased sales revenue by tapping into new demand.
3. Consider that while reducing production costs is a goal, it is impossible to reduce costs to zero; companies may seek cost advantages but not eliminate costs entirely.
4. Acknowledge that avoiding all competition is not feasible, as foreign markets often have existing competitors; companies enter to compete, not to avoid competition.
5. Note that eliminating the need for marketing is unrealistic because marketing is essential to attract and retain customers in any market, domestic or foreign.