Multiple Choice Question Trouble! (1 Viewer)

[Shell]

my class was going thru the trial multiple choice, and there was this huge discrepancy with one of the questions. It is this:

"Fudgie Monkey" manufactures confectionary. Which of the following involves the lowest risk method of international expansion?

a) Licensing an overseas producer to make confectionary
b) Establishing a production plant in China
c) Establishing a subsidiary in a country with low labour costs
d) Invoiced based exporting

The answer is a)... but most of my class argued that the correct answer is d), because in the text book it even says exporting is the lowest risk method. :s what do you guys reckon?

 

[goan_crazy]

I would say d
invoice based allows the business to have it on records?

 

[Shell]

me too!! my teachers going to check it out, then allow everyone to get the mark if they chose d

 

[~ ReNcH ~]

I would say that the answer is D.

Exporting simply requires that you sell your product overseas, possibly with the help of an intermediary. Establishing a franchise, however, will require an understanding of the foreign country's legal system and the franchisor may risk losing IP rights to the franchisee. Exporting definitely carries less risk.

 

[exa_boi87]

As Rench said, the risk of the exploition of IP makes licencing not such a vaible option. Establishing of a subsidiay and/or FDI requires an amount of capital that suggests a relative risk assosciated with it. (d) therefore is the least risky option.

the only way one could support (a) is the knowledge of the local market the oversaeas producer would have, however if 'Fudgie Monkey' chose indirect exporting, this wouldnt be a problem

 

[Rafy]

yeah i got this in my trial. Obviously its between a and d.

I put D and it was marked correct.

 

[Gibbo69er]

yeah i got this in my trial. Obviously its between a and d.

I put D and it was marked correct.

I got it in my trial today. I read about the question yesty arvo and found it and got stumped. I was tossing up between d and a, I eventually put a because if that is the corrent answer for other schools, it has to be the correct answer for mine.

If it is marked incorrect, i will object and say what i read here but not sure if thats a good idea, cos i knew the answer. but it aint cheating.... was it in the CSSA trial?

 

[v sia]

it can be C as well , thats a pretty crappy question , more detail wouda have been good

 

[v sia]

oh wait , A or D ( C pfft what was i thinking )

 

[Adimus]

a . licencing is a form of exporting

 

[*girl04*]

i would say A.

Exporting can be less riskiy, but invoiced exporting is high risk as a large % of people grab goods and run. Expoting is only not risky if pre-payment etc

 

[Densuki]

a, should b right, although D is also possible. what was the answer at the end?

 

[borkis04]

just remember its "the MOST correct option...not necessarily "ONE OF" the correct answers..

wat a bitch