Simpton Corp. wants to expand into the Mexican market. It has the financial resources, wants to control business operations, and has had considerable success marketing to Hispanics in the United States. Simpton Corp. will likely use ________ to expand into the Mexican market.

Question

Quizplus · Accepted Answer

Direct investment would give Simpton Corp. full control over its operations in Mexico, which aligns with its desire for control. It also has the financial resources to make such an investment. Exporting would not give Simpton Corp. the level of control it desires, while franchising and a strategic alliance would also mean sharing control with another party. A joint venture may be an option, but Simpton Corp. may prefer the autonomy of direct investment.