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A firm's profit potential and control over marketing activities __________ as it moves from exporting to...

A firm's profit potential and control over marketing activities __________ as it moves from exporting to direct investment as a global market entry strategy.

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Answer #1

A firm's profit potential and control over marketing activities increases as it moves from exporting to direct investment as a global market entry strategy.

Direct investment requires the firm to commit its resources to invest in and own a foreign subsidiary or division whereas simply exporting does not require the firm to sell its product in the foreign market without investing in a domestic firm or entering the market.

So, Direct Investment increases the profits by cost savings and directly controlling the economic activities in the market.

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