Establishing production facilities and a sales office in a foreign country corresponds to which market-entry mode?

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Multiple Choice

Establishing production facilities and a sales office in a foreign country corresponds to which market-entry mode?

Directly investing in a foreign market by building and owning production facilities and a local sales presence means the firm is establishing a local entity to control operations abroad. This is a foreign subsidiary, a form of foreign direct investment where the parent company owns the local company and manages its production and distribution. It contrasts with exporting, where goods are produced at home and shipped abroad; licensing or franchising, which involve granting rights to use technology or a brand to local partners with less ownership and control. The key here is ownership and direct control of both manufacturing and sales in the foreign country, which defines a foreign subsidiary.

Directly investing in a foreign market by building and owning production facilities and a local sales presence means the firm is establishing a local entity to control operations abroad. This is a foreign subsidiary, a form of foreign direct investment where the parent company owns the local company and manages its production and distribution. It contrasts with exporting, where goods are produced at home and shipped abroad; licensing or franchising, which involve granting rights to use technology or a brand to local partners with less ownership and control. The key here is ownership and direct control of both manufacturing and sales in the foreign country, which defines a foreign subsidiary.

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