SoleAce, a luxury shoe-making company, intends to expand its sales in another country. However, it wants to do so with limited investment and risk. To this end, it partners with Comfies, an overseas premium socks manufacturing company. SoleAce and Comfies sign an agreement that allows each firm to sell the products of the other firm. As a result, both generate higher sales by promoting each other's products. Which of the following business forms has SoleAce adopted?

Question

Quizplus · Accepted Answer

The business form adopted by SoleAce is piggybacking, also known as coattail marketing. This is a strategy in which a firm partners with another firm to use their distribution channels, brand recognition, and customer base to sell its own products while allowing the partner firm to do the same. It is a low-risk and cost-effective way to enter a foreign market without having to invest in a brick-and-mortar store or manufacturing facility. This approach also allows the firms to leverage each other's strengths and resources to generate higher sales.

SoleAce, a Luxury Shoe-Making Company, Intends to Expand Its Sales