Final answer:
Contract manufacturing is an international business strategy where a company enters into agreements with foreign manufacturers to produce its products or services.
Step-by-step explanation:
In the context of international business strategies, contract manufacturing is a situation where a company makes agreements with manufacturers in a foreign market to produce its product or provide its service. This allows the company to leverage the cost advantages of manufacturing in a foreign country while avoiding the complexities of setting up and managing its own manufacturing facilities abroad. Contract manufacturing can be appealing for businesses seeking to reduce costs and focus on other aspects of their business, such as design, branding, and marketing. It is important, however, for multinationals to be vigilant about the working conditions and wages in these contracted facilities, as they may not have direct control over the subcontractors used by the foreign manufacturer.