Direct penetration of foreign markets makes sense as a competitive weapon because a firm can drain vital ____ from a foreign competitor's domestic operations.
A) cash flows
B) export sales
C) dividends
D) debt

Question

Quizplus · Accepted Answer

By entering a foreign market directly, a firm can capture a share of the market and gain access to foreign competencies, which can drain vital cash flows from domestic operations of foreign competitors. This can weaken their competitiveness and give the direct penetrator a better chance of success in the foreign market. Export sales, dividends, and debt are not necessarily affected by direct penetration of foreign markets.

Direct Penetration of Foreign Markets Makes Sense as a Competitive