Super Cola (Scenario)
U.S.-based Super Cola, one of the top five cola manufacturers, has previously attempted to enter the Asian beverage market with little success. Lacking the name recognition of its competitors, Super Cola was unable to gain market share and ceased shipping its products overseas after six months. Super Cola realizes that the large Asian market would be extremely profitable, but the company requires a new strategy. Consultants hired by Super Cola propose two different methods for entering the market: licensing and franchising.
-Which of the following would occur if Super Cola entered into a licensing agreement with the Asian beverage manufacturer, Tsang Cola?

Question

Quizplus · Accepted Answer

Under a licensing agreement, Tsang Cola would produce and distribute Super Cola's product for a specified period of time. This would allow Super Cola to enter the Asian market without incurring the high costs of establishing its own manufacturing and distribution operations. It would also allow Super Cola to leverage the local knowledge and expertise of Tsang Cola in navigating the complex Asian beverage market.

Super Cola (Scenario) U.S.-Based Super Cola, One of the Top Five Cola Manufacturers