why are firms keen on international trade

why are firms keen on international trade?

there are five reasons.....

1 of 6

to gain access to large markets

allows firms to increase size of potenical market

2 of 6

to gain economies of scale

if firms produce on a large scale in order to meet the demand of the increased market, they should be able to avail of economies of scale

3 of 6

diversification

trading internationally allows firms to diversify and this then reduces the level of risk of sudden chages in demand

4 of 6

saturated home market

firms may expand overseas because their home market has become saturated with similar businesses

5 of 6

pressure from shareholders

firms may be very keen to trade globally because they may be underpressure from their shareholders to increase profit levels

6 of 6

Other cards in this set

allows firms to increase size of potenical market

to gain access to large markets

if firms produce on a large scale in order to meet the demand of the increased market, they should be able to avail of economies of scale

trading internationally allows firms to diversify and this then reduces the level of risk of sudden chages in demand

firms may expand overseas because their home market has become saturated with similar businesses

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