Sears opened up department stores in Mexico and Spain, where it found qualified local manufacturers to produce many of the products it sells. This type of joint venture is known as ________.
A) joint ownership
B) licensing
C) management contracting
D) indirect exporting
E) contract manufacturing

Question

Quizplus · Accepted Answer

The joint venture described in the scenario, where Sears found local manufacturers to produce its products, is an example of contract manufacturing. Contract manufacturing is a type of joint venture where a company enters into an agreement with a local manufacturer to produce its products. Option A (joint ownership) refers to a joint venture where two or more companies own and operate a business together, option B (licensing) refers to a type of agreement where a company allows another company to use its intellectual property in exchange for royalties, option C (management contracting) refers to a type of arrangement where a company contracts with another company to manage its operations, and option D (indirect exporting) refers to a type of exporting where a company sells its products to an intermediary, who then exports them to another country.

Sears Opened Up Department Stores in Mexico and Spain, Where