Company X\'s product has reached its maximum market share in the domestic market

Question

Company X's product has reached its maximum market share in the domestic market. The company has the capacity to operate another shift to increase production if it increases sales and can realize an overall reduction in production costs, which is the most important priority for the company. Which one of the following is the number one compelling reason for the company to begin exporting? O A. Gain experience in a foreign market O B. Establish global brand recognition O C. Expand total sales D. Avoid economies of scale O E. Increase market share

Explanation / Answer

The correct answer is “C. Expand total sales.”

Explanation: The Company has already captured the maximum share in its domestic market. Currently the company’s top priority is to increase its sales and minimize its overall production cost, which can be done by operating another shift. In this case, the biggest reason for the company to export its products will be to expand its total sales to the foreign countries. In this way they can identify the demand of the product in the foreign market and diversify the products accordingly.

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