A company wants to reduce shipping costs by producing goods closer to their customers in foreign countries. This strategy would reduce transportation costs and storage costs. The company is engaging in which strategy?
A) Franchising
B) Exporting
C) Foreign direct investment
D) Barter agreement
E) Licensing

Question

Quizplus · Accepted Answer

The strategy being described is foreign direct investment, which involves establishing a physical presence in a foreign country to produce and sell goods locally. This can help reduce transportation costs and storage costs, as goods are produced and sold closer to customers. The other options, such as franchising, exporting, licensing, and barter agreements, do not involve establishing a physical presence in a foreign country.

A Company Wants to Reduce Shipping Costs by Producing Goods