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Which of the following is generally a licensing rather than an exporting opportunity for a multinational looking to expand globally?

1) Joint venture with a local company
2) Direct investment in a foreign market
3) Franchising agreement with a local business
4) Exporting products to international markets

1 Answer

1 vote

Final answer:

Franchising agreements with local businesses are a licensing opportunity for multinationals expanding globally, wherein the local franchisee pays fees to use the multinational's brand and business model.

Step-by-step explanation:

Among the options provided for a multinational looking to expand globally, franchising agreements with local businesses represent a licensing opportunity rather than exporting. In a franchising model, a multinational corporation offers the rights to use its brand, products, and operational model to a local business, which is known as the franchisee. The franchisee pays a franchise fee and ongoing royalty fees to the franchisor. This allows the multinational to expand its brand presence and market share without direct investment in foreign markets or joint ventures.

Other methods such as joint ventures with local companies, direct investments in foreign markets, and exporting products to international markets involve different strategies and levels of control for a multinational corporation looking to operate globally.

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