The Jet Group, headquartered in NY, specializes in the design, production, and distribution of high-end parts for passenger aircraft. The company has a well-established international presence, operating 92 factories across 8 countries. The company is considering moving its production operations to Sri Lanka, with a long-term goal of eventually entering South Asian markets. Some company executives favor the idea of contract manufacturing using local players, whereas others feel a direct investment would be better. What would MOST strengthen the argument for contract manufacturing?
A. Jet would like to have complete control over the manufacturing process.
B. This move will help promote ties with the local government
C. Most of Jet's competitors have opted for licensing.
D. Jet does not want to assume too much risk, at least initially.
E. Jet will be able to provide employment to the locals.
Answer: D
Learn More :
GEB Chapter 3
- There are those who hope that ______ is a stepping-stone to the creation of a Free Trade Area of the Americas. This agreement today is between the United States, Canada, and Mexico.
- When the value of exports from a country exceeds the value of imports into that country, there is a _______________.
- Even though the nation faces political instability, the island of Frollik with its wide, expansive beaches is a destination hub for cruise lines. Recently, a large theme park company showed strong interest in buying land in Frollik with the intent of building a park targeted toward families. The company wants to make a commitment to Frollik, including the hiring of several hundred local employees. They're using a global marketing strategy called ____________.
- The EU is an example of a trading bloc, or a______________, which has a common external tariff, no internal tariffs and the coordination of laws to facilitate trade between member countries.
- During the past five years, the nation of Andolvia began a massive undertaking: teaching farmers how to successfully grow and harvest peanuts. The government subsidized the building of peanut processing plants, where private businesses are now producing peanut butter and other products of nutritional value. Although the Andolvia government has not completely banned the importation of peanuts, it has placed ________________ on the number of peanut products that the nation can import each year, in order to protect Andolvia's young peanut industry.
- The strategic alliance between Coca-Cola and Nestlé has spanned a period of over 20 years due to the fact that both companies benefit from this arrangement. As a global marketing strategy, an important characteristic of a strategic alliance is _____________.
- The makers of Whirlpool washers and other electrical appliance manufacturers need to be concerned about the kind and availability of electricity in the global marketplace. If there were a compatibility problem, it would be the result of a _____________difference.
- ___________ is a cost-effective way that many companies outsource the production of goods, such as clothing, shoes, and cell phones. The domestic firm contracts with a foreign company to produce and private-label the goods, because the price is much cheaper than the domestic firm could produce in its' home market.
- We refer to the BRIC nations as four global economic powers that will likely be important forces in world trade by 2030. It is predicted that the two nations that will supply the world with most of the world's raw materials are ___________.
- According to Geert Hofstede, who has spent a lifetime studying differences in cultures, the Chinese have a long-term orientation, meaning they are patient savers and are willing to forgo things today, for a better future. Americans typically have a short-term orientation. They prefer more instant gratification and are not as willing to save for the future. This difference in values between the Chinese and Americans is a _____________ attribute that may represent a challenge in future global trade.
- Besides the shift of jobs to foreign countries, outsourcing has other drawbacks such as __________.
- Americans are often accused of ethnocentricity. This means that:
- All of the following are reasons for countries to participate in foreign trade except:
- The nation of Andulasia exports $50 million worth of products and services and imports $44 million worth of products and services. Andulasia has a(n) _____________.
- Sovereign wealth funds (SWFs) are a fast-growing form of foreign direct investment. The size of these funds and the fact that they are investments from government coffers of other nations might be a cause for concern. More specifically, some fear __________.
- The Republic of South Africa exports edible fruits and nuts into the common market known as the European Union, and imports from the European Union other products which South Africa could produce but at a higher cost than what it costs the Europeans to produce. This practice follows the premise of _________________.
- Using government regulations to limit the import of goods and services is called:
- The law that specifically prohibits "questionable" or "dubious" payments to foreign officials in an effort to secure business contracts is called the:
- In global trade, the term "dumping" refers to:
- Recently, two nations experienced a trade dispute over copyright issues. Country "A" accused Country "B" of violating international copyright laws. Since both were members of ______________, they appealed to this organization to mediate the dispute.
- Buying products produced in another country is known as:
- Because of the high volume of bicycles as a common form of transportation in Beijing and Shanghai, Charles wants to sell his bicycle horns to these markets. In this case, the exchange rate is $1 U.S. dollar = 6.42 Chinese yuan. Economically speaking, how are his prospects?
- As a strategy for reaching global markets, licensing provides the licensor with several advantages. One advantage is _____________.
- The difference between money coming into a country from exports and money leaving a country due to imports, plus money flows from other factors, is known as the:
- _________ is the world's largest exporter.