Alumna, a ceramics-manufacturing company in Denmark, is trying to market its products in Bulgaria. The company has assigned the production of its goods to a local company in Bulgaria to take advantage of the low labor costs and also to avoid the import duties on the products. In this case, the strategy used by Alumna for entering foreign markets is an example of _____.

Question

Quizplus · Accepted Answer

Subcontracting involves hiring another company to produce goods or services, which is what Alumna is doing by assigning production to a local company in Bulgaria. This allows them to benefit from lower labor costs and avoid import duties.

Alumna, a Ceramics-Manufacturing Company in Denmark, Is Trying to Market