Assume a domestic company in the US, let's say Colgate-Palmolive, is deciding to export to a country where to date Colgate products are not present. Which method of entry will demonstrate lower fixed costs associated?

Question

Deanna

Business

22 March, 09:40

Assume a domestic company in the US, let's say Colgate-Palmolive, is deciding to export to a country where to date Colgate products are not present. Which method of entry will demonstrate lower fixed costs associated?

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Answers (2)

Know the Answer?

Layton Dalton · Answer 1

agent method of entry

Explanation:

Agent method of entry will demonstrate lower fixed costs associated.

Ruby Gardner · Answer 2

Answer: Licensing

Explanation:

Licensing can be defined as the method of foreign operation in which a company in one country (licensor) agrees to allow a company in another country (licensee) to its manufacturing, processing, trademark, know-how or any other skill.

For example, in Zimbabwe, United Bottlers have the licence to make Coke. In this case, a certain amount will be paid to the coca cola company periodically.

The advantage of adopting the licensing method of entering a new country is that, it involves little expense and involvement. In fact, the only cost incurred is during the signing of the agreement and supervising its implementation.