Scenario: Sports Stuff, Inc.
Herb Graham is vice president of Sports Stuff, a business that develops, manufactures, and markets sports memorabilia. The company is looking to expand its operations into the European market. Herb believes that if the company expands its product line to include products reflecting sports that are popular in Europe, the company will achieve success there.
-If Sports Stuff wants to hire a company to design, construct, and test a production facility on its behalf, the company might consider a ________.
A) joint venture
B) turnkey project
C) wholly owned subsidiary
D) franchise

Question

Quizplus · Accepted Answer

A turnkey project involves hiring a company to design and construct a production facility on behalf of Sports Stuff. This option would allow Sports Stuff to have control over the expansion process without having to build the facility themselves. Joint venture involves Sports Stuff partnering with a company in Europe to share ownership and control of the expansion, while a wholly owned subsidiary involves Sports Stuff establishing a separate legal entity in Europe. Franchising would not apply in this scenario as it involves licensing the rights to use a company's brand and operating system.