Georgia DECA Advertising Practice Test

What advantage does a manufacturing firm gain by having international clients and suppliers?

1. Increased market share

2. Globalization

3. Revenue diversification

4. Cost reduction

The correct answer is: Globalization

The advantage a manufacturing firm gains by having international clients and suppliers is best captured by the concept of globalization. Globalization refers to the process by which companies expand their reach beyond domestic borders to engage with international markets. By establishing relationships with international clients, a manufacturing firm can access new customer bases, potentially increasing sales and market penetration. Additionally, having suppliers from various countries allows firms to source materials more efficiently, benefiting from competitive pricing and unique products not available in domestic markets. This global connectivity can lead to a more resilient business model, as firms can mitigate risks associated with economic downturns in any single market. It fosters innovation through exposure to diverse ideas and practices, ultimately contributing to a more competitive edge in the global marketplace. While increased market share, revenue diversification, and cost reduction are valid advantages of having international clients and suppliers, they are more specific outcomes that can result from the broader process of globalization. Globalization encompasses the overarching strategy that leads to these benefits.