Derrido's marketing director thinks that the company should craft a contractual agreement as an initial entry strategy, because the company might want to choose a more advanced entry strategy later. Which of the following, if True, would strengthen this position?
A) Foreign partners usually want to enter into contractual agreements with American companies for a long-term period.
B) A contractual agreement should spell out as many expectations of the foreign partner as possible.
C) Contractual agreements should be entered into only if the foreign partner is extremely reliable.
D) Contractual agreements require approval by legal specialists from all countries involved.
E) Contractual agreements allow a company to provide for open, flexible terms of operation.

Question

Quizplus · Accepted Answer

E) If the company can enter the international market with flexible terms, that will allow it to change to a more advanced strategy later. If foreign companies usually want to enter into long-term contracts (Choice A), the marketing director faces difficulties getting them to sign a short-term one that allows Derrido the flexibility to pursue a new strategy later. Choices B, C, and D stipulate items of caution for a company entering into a contractual agreement with a foreign partner, but they do not strengthen the case for a short-term contractual agreement.

Derrido's Marketing Director Thinks That the Company Should Craft a Contractual