Asked by christopher Neville on Apr 29, 2024
Verified
Talia wants to sell her products in Europe, since they are doing well in the United States. She does not have a lot of capital and is risk-averse, so she most likely would choose to begin with
A) opening a franchise.
B) exporting her products.
C) forming a strategic alliance with another company.
D) entering a joint venture with a local firm.
E) making a direct investment in another country.
Capital
In economics, capital refers to financial assets or the financial value of assets, such as funds held in deposit accounts, as well as the physical factors of production and facilities.
Risk-Averse
The preference to avoid taking risks, favoring safer or more predictable outcomes over potentially higher but riskier rewards.
Exporting
Exporting is the process of selling goods or services produced in one country to buyers in other countries.
- Analyze and judge different methods of international expansion according to their associated risks and controls.
Verified Answer
MT
Marcus TippinsMay 03, 2024
Final Answer :
B
Explanation :
Exporting her products would be the best choice for Talia as it requires the least amount of capital and risk compared to the other options. She can test the European market by exporting a small quantity of products and evaluating the demand. If it does well, she can slowly increase her exports and eventually consider other options like forming a strategic alliance or joint venture. Franchising and direct investment require a significant amount of capital, and joint ventures involve partnering with a local firm, which can be risky.
Learning Objectives
- Analyze and judge different methods of international expansion according to their associated risks and controls.