Business Principles Chapter 3 Assignment with
100%correct answers
With "1" being the least and "6" being the most, place the following strategies in order of magnitude
from least to most regarding the level of commitment, amount of risk, the amount of control, and the
profit potential - (correct Answer) - 1. licensing
2. exporting
3. franchising
4. contract manufacturing
5. international joint ventures and strategic alliances
6. foreign direct investment
exporting example - (correct Answer) - Foreign Customers: L'Oréal sells its beauty products to men in
China.
joint venture/strategic alliance example - (correct Answer) - Campbell's Soup: Campbell's Soup Company
and Nakano Vinegar form Campbell Nakano.
contract manufacturing - (correct Answer) - US Cellular: Flextronics in Singapore makes a cell phone for
US Cellular.
franchising example - (correct Answer) - KFC: KFC opens stores in Hong Kong.
Foreign Direct Investment example - (correct Answer) - Bank of America: Bank of America purchases
office space in India for its online customer service representatives.
licensing example - (correct Answer) - Budweiser: Anheuser-Busch will contract with a local firm to brew
and market Budweiser.
100%correct answers
With "1" being the least and "6" being the most, place the following strategies in order of magnitude
from least to most regarding the level of commitment, amount of risk, the amount of control, and the
profit potential - (correct Answer) - 1. licensing
2. exporting
3. franchising
4. contract manufacturing
5. international joint ventures and strategic alliances
6. foreign direct investment
exporting example - (correct Answer) - Foreign Customers: L'Oréal sells its beauty products to men in
China.
joint venture/strategic alliance example - (correct Answer) - Campbell's Soup: Campbell's Soup Company
and Nakano Vinegar form Campbell Nakano.
contract manufacturing - (correct Answer) - US Cellular: Flextronics in Singapore makes a cell phone for
US Cellular.
franchising example - (correct Answer) - KFC: KFC opens stores in Hong Kong.
Foreign Direct Investment example - (correct Answer) - Bank of America: Bank of America purchases
office space in India for its online customer service representatives.
licensing example - (correct Answer) - Budweiser: Anheuser-Busch will contract with a local firm to brew
and market Budweiser.
