The best means to accomplish the revenue-related motive of attracting new sources of demand is to:
A) acquire a competitor that has controlled its local market.
B) establish a subsidiary or acquire a competitor in a new market.
C) establish a subsidiary in a market where tougher trade restrictions will adversely affect the firm's export volume.
D) establish subsidiaries in markets whose business cycles differ from those where existing subsidiaries are based.

Question

Quizplus · Accepted Answer

Establishing a subsidiary or acquiring a competitor in a new market is the best means to attract new sources of demand. This allows the company to expand its reach into a new market with established demand, and potentially gain a competitive advantage by acquiring a competitor with a strong foothold in that market. Acquiring a competitor that has controlled its local market (option A) may not necessarily translate into new sources of demand for the acquiring company. Establishing a subsidiary in a market where tougher trade restrictions will adversely affect the firm's export volume (option C) may not necessarily provide new sources of demand, and may be more focused on mitigating risks. Establishing subsidiaries in markets whose business cycles differ from those where existing subsidiaries are based (option D) may provide some diversification benefits, but may not necessarily guarantee new sources of demand.

The Best Means to Accomplish the Revenue-Related Motive of Attracting