Axiom International wants to expand its operations to a country that is politically,culturally,and economically different from its home country.The firm needs to select a mode of entry which would give it access to local knowledge,allow sharing of development costs and risks,and also be politically acceptable.Which of the following modes of entry into foreign markets is most suitable for Axiom International?
A) Wholly owned subsidiary
B) Joint venture
C) Exporting
D) Greenfield investments
E) Licensing

Question

Quizplus · Accepted Answer

A joint venture would allow Axiom International to share the development costs and risks with a local partner, as well as gain access to local knowledge. This mode of entry would also be politically acceptable as it involves partnering with a local firm, which can help to build relationships and reputation in the country. Wholly owned subsidiaries and greenfield investments may be too expensive and risky, while exporting and licensing do not provide the level of control and access to local knowledge that Axiom International may need in a new, different market.

Axiom International Wants to Expand Its Operations to a Country