Refer to the scenario below to answer the following questions.
International Entrepreneurs (Scenario)
Jennifer and James have formed an entrepreneurial venture to develop software for banks and other financial institutions. Their company is growing, but in looking for opportunities in the future, they decide to explore international operations.
-Jennifer and James decide to allow a company in Hong Kong to use the rights to their software, its brand name, and product specifications in return for a fee based on sales. This agreement best illustrates which of the following international expansion strategies?
A) global sourcing
B) export alliance
C) licensing
D) foreign subsidiary
E) joint venture

Question

Quizplus · Accepted Answer

The agreement between Jennifer and James and the company in Hong Kong is a licensing agreement, as it allows the use of the software, brand name, and product specifications in exchange for a fee based on sales. This is a common strategy for international expansion, as it allows companies to avoid the costs and risks associated with directly entering foreign markets, while still generating revenue and expanding their reach. Global sourcing involves sourcing materials or components from foreign suppliers, export alliances involve partnering with other companies to export products, foreign subsidiaries involve setting up a wholly owned subsidiary in a foreign country, and joint ventures involve collaborating with a local company to form a new business entity.

Refer to the Scenario Below to Answer the Following Questions