Mitsubishi Heavy Industries and Kawasaki Heavy Industries produce McDonnell Douglas's F-15 fighter planes in Japan.The two Japanese companies pay McDonnell Douglas royalties for use of its manufacturing processes and patents.This is an example of:
A) contract manufacturing
B) exporting
C) joint venture
D) licensing
E) strategic investment

Question

Quizplus · Accepted Answer

A firm can do business internationally with relatively low risk by selling a license to manufacture its product to someone in a foreign country.For a royalty or fee,the selling firm agrees to let the buying firm use its manufacturing processes,trademarks,patents,trade secrets,and so on.

Mitsubishi Heavy Industries and Kawasaki Heavy Industries Produce McDonnell Douglas's