PepsiCo entered into a long-term contract with a South African beverage company. The contract calls for the South African firm to produce and market Pepsi products in the country. PepsiCo will receive royalties on each case of sodas sold. This is an example of
A) licensing.
B) a joint venture.
C) a foreign subsidiary.
D) foreign direct investment.

Question

Quizplus · Accepted Answer

Soft drink companies, like Pepsi and Coke, often enter foreign markets by licensing the right to manufacture their product or use their trademark to a foreign company for a fee (royalty).

PepsiCo Entered into a Long-Term Contract with a South African