NaviCal Inc., a personal navigation system company, has contracted its manufacturing to a firm in Malaysia for five years. NaviCal had high financial growth, and it wants to purchase the manufacturing facility. This market entry method is called ________.

Question

Quizplus · Accepted Answer

Direct foreign investment involves a company investing directly in a foreign country by creating a subsidiary or acquiring an existing business. In this case, NaviCal Inc. wants to purchase the manufacturing facility in Malaysia, which is an example of direct foreign investment. Franchising, strategic alliance, joint venture, and licensing are all different market entry methods, but they do not involve the direct ownership of a facility or subsidiary in a foreign country.