A large automobile manufacturer wants to expand its market for mid-size cars to a country with a large population and sizeable working class. In addition, this country is also known to be a source for cheap labor. This is something that could help the auto company significantly improve its production efficiency. Which of the following methods of engaging in international business will help the company best achieve these goals?

Question

Quizplus · Accepted Answer

A foreign subsidiary would be the best choice for the automobile manufacturer as it would allow for the company to establish a physical presence in the country and take advantage of the large population and low labor costs. This would also allow for greater control over production and potentially minimize cultural differences in business practices. Joint ventures and international franchising may not provide the same level of control or potential cost savings, and international licensing may not allow for the physical presence needed to expand the market.

A Large Automobile Manufacturer Wants to Expand Its Market for Mid-Size