Vactin Motors, an automobile company, is a well-recognized brand. It does not have the capital and capabilities to set up manufacturing units abroad, although it is keen to have its products made in the foreign market. It decides to have the products produced and sold under its brand name. In this case, which of the following modes of international market entry should be adopted by Vactin?

Question

Quizplus · Accepted Answer

Franchising would be the best mode of international market entry for Vactin Motors in this case. Since Vactin does not have the capital and capabilities to set up manufacturing units abroad, franchising would allow Vactin to have its products produced and sold under its brand name by local entrepreneurs who would be responsible for investing in and operating the businesses. This would allow Vactin to expand its brand presence in the foreign market without bearing the financial burden of setting up manufacturing units.

Vactin Motors, an Automobile Company, Is a Well-Recognized Brand