Question

Mirros, a U.S. kitchenware distributor, sells its inventory twice a year to All Cooks, a kitchenware retailer in the United State. All Cooks, in turn, sells those products through its retail stores in Vietnam and Thailand. In which of the following entry modes is Mirros most likely engaged?

a. a joint venture
b. franchising
c. indirect exporting
d. direct foreign investment
e. a consortium

Answer 1

Mirros is engaged in indirect exporting because it sells its kitchenware to All Cooks, which then sells the products overseas in Vietnam and Thailand. There is no direct investment or partnership by Mirros in these foreign markets.

Step-by-step explanation:

The entry mode that Mirros, a U.S. kitchenware distributor, is most likely engaged in when selling its inventory to All Cooks, which in turn sells the products in Vietnam and Thailand, is c. indirect exporting.

This is because Mirros is selling its goods to an intermediary (All Cooks), which then sells the products internationally. Mirros is not engaged in a joint venture, franchising, direct foreign investment, or a consortium because it does not have a direct investment or partnership in the foreign markets where the goods are finally sold.

Direct foreign investment would require Mirros to invest in the foreign market, a joint venture would involve a partnership in the foreign country, franchising would mean giving rights to use the business model, and a consortium involves a group of companies joining forces for a common goal.