How Can Firms Increase Profits
Through International Expansion?
■ International firms can
1. Expand their market - sell in international markets
2. Realize location economies - disperse value creation
activities to locations where they can be performed most
efficiently and effectively
3. Realize greater cost economies from experience effects -
serve an expanded global market from a central location
4. Earn a greater return - leverage skills developed in foreign
operations and transfer them elsewhere in the firm