Question

A firm’s profit potential and control over marketing activities increases as it moves from exporting to direct investment as a global market-entry strategy. But so does the firm’s _____.

A. likelihood of long-term success.
B. financial commitment and risk.
C. vulnerability to political changes and doctrines.
D. need for a more educated workforce.
E. need for a larger workforce.

Answer 1

Answer:

B. financial commitment and risk.

Explanation:

According to the alternative Global market-entry strategy, a firm's profit and control over marketing activities increase when it converts into a direct investment firm. In that case, there is a high financial commitment and risk to go global. It is challenging for the firm to become successful in the long-run. However, it does not need a larger workforce. Therefore, option B is correct.