GHB Corp. is a manufacturer of consumer goods. It intends to sell its products in Vietnam as it is looking to enter into Asian markets. It does not want to make any equity investment and is keen on minimizing any risk of loss in the foreign market. It is also willing to settle for a low rate of return. Which of the following types of foreign market-entry strategies is GHB most likely to follow?

Question

Quizplus · Accepted Answer

In this case, GHB Corp. is most likely to follow indirect exporting. The amount of equity required by a company to use different modes affects the risk, return, and control that it will have in each mode. Indirect exporting requires no equity investment and thus has a low risk, low rate of return, and little control.

GHB Corp Is a Manufacturer of Consumer Goods