Farm Tuff Inc. hired a local agent to handle marketing when it started exporting products to Europe. Unfortunately, the local agent also handled the marketing for a competitor, Agri-Corp., and Farm Tuff soon realized the agent could not be "loyal" to their product. What should Farm Tuff do to best remedy this situation to its advantage?
A) Implement a tariff on their products.
B) Discontinue their exporting efforts.
C) Export only process technology to foreign firms.
D) Develop a licensing deal instead of exporting.
E) Set up a wholly owned subsidiary to handle local marketing.

Question

Quizplus · Accepted Answer

Setting up a wholly owned subsidiary allows Farm Tuff to have full control over its marketing efforts in Europe, eliminating conflicts of interest and ensuring loyalty to their products.