Lower costs in the form of cheaper labor or raw materials and the opportunity to gain better first-hand knowledge of the wants and needs of consumers in the local market are factors that would likely lead a company to ________ in a foreign market.

Question

Quizplus · Accepted Answer

Making a direct investment, such as establishing a subsidiary or joint venture, would allow a company to take advantage of lower costs and gain better knowledge of the local market by operating directly in it. Direct investment also provides greater control over operations and intellectual property compared to licensing or franchising, and may offer more sustainable profitability compared to indirect exporting. Therefore, using direct investment is the best choice in this scenario.

Lower Costs in the Form of Cheaper Labor or Raw