Which of the following, if True, would strengthen the argument for venturing into the Chinese market?
A) The affluent Chinese middle class is large and is quick to adopt western lifestyles and product preferences.
B) Growth in the United States cereal market continues to be strong.
C) The Chinese fixed exchange rate regime may change, which could mean a stronger Yuan that would affect Chinese exports.
D) Chinese food preferences are very slow to evolve.
E) China recently signed a free-trade agreement with the Association of Southeast Asian Nations (ASEAN).

Question

Quizplus · Accepted Answer

A) Entering a foreign market entails risk, so first a company wants to determine if there will be a demand for its products in the new market. Choice A tells us that members of the Chinese middle class are quick to try and use American products. This bodes well for Lite Foods, suggesting that an appealing market exists and that few product and marketing adaptations will be needed. Choice B suggests that Lite Foods has room to grow in the United States, which makes the risk of entering the Chinese market less attractive. Choice C talks about Chinese exports, which are not under consideration in this scenario. Lite Foods would be concerned with economic changes affecting imports into China. Choice D weakens the argument for entering the Chinese market, as it suggests that the Chinese would be slow to adapt the product. Choice E isn't clearly relevant to Lite Foods' decision to enter the Chinese market. It would only be relevant if Lite Foods had an operation based in the ASEAN region, information that we don't have.

Which of the Following, If True, Would Strengthen the Argument