Lower costs in the form of cheaper labor or raw materials, foreign government investment incentives, freight savings, and the opportunity to improve the company image are the factors that would most likely lead a company to enter a foreign market using the market entry strategy of ________.
A) direct exporting
B) licensing
C) management contracting
D) indirect exporting
E) direct investment

Question

Quizplus · Accepted Answer

Direct investment involves establishing a subsidiary or affiliate in a foreign country, which allows a company to have complete control over its operations, including sourcing raw materials and hiring local labor. This strategy can help a company take advantage of lower costs and government incentives, as well as improve its image by showing a commitment to the local market. Direct exporting (A) and indirect exporting (D) do not involve establishing a physical presence in the foreign market, and therefore may not provide the same cost-saving and image-building benefits. Licensing (B) and management contracting (C) involve granting another company the rights to use intellectual property or manage operations in a foreign market, but may not provide the same level of control or cost savings as direct investment.

Lower Costs in the Form of Cheaper Labor or Raw