Scenario: Sports Stuff Inc.
Herb Graham is vice president of Sports Stuff Inc., a business that develops, manufactures, and markets sports products. 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.
-Which of the following entry modes would Sports Stuff be implementing if it hires a company to design,construct,and test a production facility on its behalf?
A) joint venture
B) turnkey project
C) wholly owned subsidiary
D) franchising

Question

Quizplus · Accepted Answer

A turnkey project involves hiring a company to design, construct, and test a production facility on behalf of the hiring company. This entry mode would allow Sports Stuff to have complete control over its operations while avoiding the risks of building and operating the facility themselves. Joint venture involves sharing ownership and control with a local partner, wholly owned subsidiary involves establishing a new company in the foreign market with complete ownership and control, and franchising involves licensing the use of the company's brand and business model to a local partner. None of these options involve hiring a company to design and construct a production facility.