Which of the following is true about the market entry strategy of direct investment?
A) It allows a foreign firm to take advantage of a domestic company's political savvy and market position.
B) It relies on export merchants to analyze the local market.
C) It provides the lowest level of risk for a firm.
D) It relies on intermediaries to represent the company in a target country.
E) It provides the lowest level of control for a firm.

Question

Quizplus · Accepted Answer

Direct investment allows a foreign firm to benefit from the domestic company's market position, local knowledge, and political connections, making it an attractive market entry strategy. It involves establishing a physical presence in the target market, such as setting up a subsidiary, joint venture, or acquiring a local company. It provides a high level of control and enables the firm to manage its operations directly. However, it also involves a higher level of risk due to the substantial investment required in infrastructure, human capital, and other resources.

Which of the Following Is True About the Market Entry