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

• A. To avoid competition entirely
• B. To access new markets and increase potential sales
• C. To limit its customer base to a single country
• D. To reduce the quality of its products

Answer: (B)

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 its domestic market to international markets.
2. Identify the main motivations for a firm to globalize, such as accessing new markets, increasing sales potential, achieving economies of scale, or acquiring resources.
3. Evaluate each option by considering whether it aligns with typical business incentives for globalization. For example, avoiding competition entirely is unrealistic because global markets often increase competition.
4. Recognize that limiting the customer base to a single country contradicts the idea of globalization, which aims to expand the customer base internationally.
5. Conclude that the primary reason a firm globalizes is to access new markets and increase potential sales, which aligns with the goal of business growth and expansion.