Question

Refer to the scenario below to answer the following question(s). Selman & Saks, a maker of men's and women's razors and electric hair trimmers, had little reason to become involved in the global arena. But after acquiring Wellman Enterprises, whose largest division engages in a licensing agreement with a German firm to produce women's hosiery, managers at Selman & Saks wondered whether a company-wide global focus would be more profitable after all. Managers at Selman & Saks studied Wellman's licensing agreement in great detail. Even after seeing the benefits Wellman achieved with the licensing agreement, managers decided that Selman & Saks would target the French market merely via exporting. With the assistance of a domestic export department, Selman & Saks razors and hair trimmers entered France. For six months, sales were mediocre. But after that, sales suffered. Opinions varied among numerous managers as to the cause of the failure. "Who knows the local market better than people who live there?" was a comment heard throughout Selman & Saks. "Maybe we needed an alliance with a French firm, or a licensing agreement, before racing to get there." If Selman & Saks allowed a French company to produce and market razors and trimmers carrying the company's brand in exchange for a royalty, Selman & Saks would be using the market entry strategy of ________.

Answer 1

Licensing

Step-by-step explanation:

Based on the scenario, it can be said that the Selman & Saks would be using the market entry strategy of Licensing. This is an arrangement in which the firm transfers the rights to be able to use a certain product or service to another firm. Therefore the other firm is able to produce and market the product as their own in order to make profit on it. Which is what Selman & Saks are doing by allowing the French company to produce and market razors and trimmers carrying the company's brand.