Which of the following, if True, would strengthen the argument for exporting the company's products to China?
A) Lite Foods has a large budget set aside for foreign direct investments.
B) Lite Foods wants to have strict control over its international operations.
C) Lite Foods has to modify its product line to suit Chinese tastes and preferences.
D) Lite Foods' products do not have a "healthy" reputation in the United States.
E) Lite Foods has significant excess capacity that results in production overruns.

Question

Quizplus · Accepted Answer

E) Companies may passively export their surpluses from time to time, or they may make an active commitment to expand exports to a particular market. In this case, the excess capacity acts as a trigger for Lite Foods. Choice E strengthens the argument. Choices A and B favor foreign direct investment over exporting. Choices C and D do not tell us anything about exporting or any other form of market entry. The need for product modifications is expected and doesn't favor exporting over other types of market entry. The unhealthy reputation of the cereals in the United States would have little bearing on how those products are perceived in China.

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