Answer :

Firms derive many benefits by entering into international business such as the following:

a. The firms whose products have a high demand in the domestic market set up high production capacity for their products by planning for overseas expansion as well.

b. International business is more profitable. They earn a high level of profit by selling its products in countries where the prices are high, especially whent he domestic prices are low.

c. When the demand for the goods begin to be saturated in the domestic market, the firm can enter into an international market.

d. The firm can acheive a high degree of growth in intense competition in domestic market is by entering into international business.

e. Many companies form strategic policies and management and are able to gain in the international market.

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