Your company is interested in producing and marketing a line of coffee that will penetrate the Chinese market. Your firm is willing to supply the equipment, products, product ingredients, trademark, and standardized operating system to entrepreneurs. What type of strategy are you going to use?
A) Wholly owned foreign affiliate
B) A greenfield venture agreement
C) A franchise
D) An export agreement
E) Barter trade

Question

Quizplus · Accepted Answer

The best choice for this scenario is to use a franchise strategy. This allows the company to provide entrepreneurs in China with the necessary equipment, products, and operating system, while also allowing them to use the company's trademark. This gives the company control over the quality of its products while also allowing it to expand into the Chinese market with lower risk and investment than with a wholly owned foreign affiliate or a greenfield venture agreement. An export agreement or barter trade would not be suitable for producing and marketing a line of coffee in China.

Your Company Is Interested in Producing and Marketing a Line