Which one of the following modes of entry brings the firm closer to international markets?

(a) Licensing

(b) Franchising

(c) Contract manufacturing

(d) Joint venture

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Solution

The mode of entry that brings a domestic firm closer to international markets is contract manufacturing. This is because contract manufacturing enables the firm to be associated with international markets and reap benefits from the opportunities available. On the other hand, modes such as licensing and franchising and joint ventures do not allow much access to foreign markets.

Hence, the correct answer is option (c).

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Which one of the following modes of entry requires higher level of risks?

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(b) Franchising

(d) Joint venture

Which one of the following modes of entry permits greatest degree of control over overseas operations?

(a) Licensing/franchising

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Outsourcing a part of or entire production and concentrating on marketing operations in international business is known as

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