ABC Tractor Company wants to enter the Chinese market.Chinese law prevents foreign entities from owning a majority position in a company there.The best method of entry for ABC is _________.
A) Franchise
B) Joint venture
C) Direct sales force
D) Strategic alliance
E) Licensing

Question

Quizplus · Accepted Answer

A joint venture allows ABC to partner with a Chinese company and share ownership, allowing them to meet the legal requirements for doing business in China. This also allows ABC to benefit from the knowledge and expertise of a local partner in navigating the cultural and regulatory landscape in China. None of the other options provide a solution to the ownership restriction imposed by Chinese law.

ABC Tractor Company Wants to Enter the Chinese Market