Company X plans to enter a foreign market by purchasing land and building a new facility.What should Company X most likely do to improve its chances of success?
A) develop a knowledgeable local network of business associates
B) send home-country representatives to manage construction
C) acquire a small, local firm in the logistics industry
D) engage in e-commerce to identify local demands
E) leverage economies of scale in the local market

Question

Quizplus · Accepted Answer

Developing a knowledgeable local network of business associates will help Company X understand the cultural and business norms of the foreign market and build relationships with key stakeholders, which is essential for success. Sending home-country representatives may not have the same level of understanding of the local market and may face challenges in managing construction in a different cultural environment. Acquiring a small, local firm in the logistics industry may not be necessary if Company X can build its logistics capabilities in-house. Engaging in e-commerce can help identify local demands, but it may not be sufficient to ensure success in the foreign market. Leveraging economies of scale in the local market may be difficult if Company X is just entering the market and may require significant investment upfront.

Company X Plans to Enter a Foreign Market by Purchasing