Minimizing Trade Barriers (Scenario)
National Appliance Corporation (NAC) needs to build a new manufacturing facility to meet the increasing demand for professional-grade appliances. NAC managers are considering building the facility in Mexico but are hesitant because of the high tariffs involved. Another possible location for the facility is India; however, the country also imposes high tariffs. Wherever NAC builds a plant, parts will need to be imported from other nations.
-Given the high trade barriers in Mexico, the management of NAC is most likely to consider ________ to be an inappropriate entry strategy.
A) exporting
B) FDI
C) joint ventures
D) licensing

Question

Quizplus · Accepted Answer

Exporting is likely to be considered an inappropriate entry strategy by NAC's management due to the high tariffs involved in both Mexico and India, which would increase the cost of sending goods to these countries.