Axiom International,an Australian company,wants to expand its operations to China,a country that is politically,culturally,and economically different.The firm needs to select a mode of entry that 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?

Question

Quizplus · Accepted Answer

A joint venture is the most suitable mode of entry for Axiom International as it will allow them to access local knowledge that is needed to operate in a culturally and politically different country like China. Moreover, by sharing the development costs and risks with a local partner, Axiom International can minimize its exposure to financial and operational risks. Also, the joint venture will be more politically acceptable than other modes of entry, such as wholly owned subsidiary or greenfield investments, as the Chinese government often prefers foreign companies to form partnerships with local firms. Exporting and licensing are not suitable options as they do not provide the level of control and access to local knowledge, which Axiom International requires for its expansion into China.

Axiom International,an Australian Company,wants to Expand Its Operations to China,a