Is gaining access to low-cost labor a sufficient reason for a firm to pursue an international strategy? Why or why not? Is gaining access to special tax breaks a sufficient reason for a firm to pursue an international strategy? Why or why not? Are international strategies always just aspecial case of diversification strategies that a firm might pursue?

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Asked Jul 22, 2019
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Is gaining access to low-cost labor a sufficient reason for a firm to pursue an international strategy? Why or why not? Is gaining access to special tax breaks a sufficient reason for a firm to pursue an international strategy? Why or why not? Are international strategies always just a
special case of diversification strategies that a firm might pursue?

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Expert Answer

Step 1

International strategy:

International strategy is the process or strategy to explore opportunities in the international market using the core competencies of the firm.

Diversification strategy:

Diversification strategy will be followed by the firm when they are about to introduce a new product into the market. This strategy can be adopted for the development of the business.

Step 2

Determine whether gaining access to low-cost labor or special tax breaks is sufficient to pursue an international strategy:

Gaining access to low-cost labor and special tax breaks are collectively sufficient for a firm to pursue an international strategy but not individually enough. Cheap labor is the most important for an international firm, as countries differ in per capita income.

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