Question

If a company is experiencing increasing pressures for cost reduction for its products, which of the following courses of action should it consider?
a. sell licenses to produce the products internationally.
b. explore opportunities for exporting or create a wholly-owned subsidiary within a country.
c. establish a joint venture with a foreign company.
d. pursue a franchising model for the company.

Answer 1

Answer: explore opportunities for exporting or create a wholly-owned subsidiary within a country

Explanation:

When a company is experiencing increasing pressures for cost reduction for its product, the course of action should be considered by the company is to explore opportunities for exporting or create a wholly-owned subsidiary within a country.

This is necessary to bring about economies of scale which in turn leads to lesser production cost and cheaper prices for the products.