Question

A U.S. manufacturer of computer chips wants to produce some of its chips in Japan. The U.S. company wants to do this with as little financial investment and risk as possible. It also does not want to be actively involved with the Japanese company. Which expansion method should the U.S. company use?

Answer 1

Answer:

use of licensing agreement method

Explanation:

It could be inferred from the question that the US manufacturer wants a right to produce in Japan.

A licensing agreement between the US company offers the right to distribute or manufacture the computer chips in a foreign country such as Japan. The US manufacturer would usually pay a fee in exchange for the rights.

This is a cheaper option because the US manufacturer would incur lesser costs and risks since there is an established product and fewer legal risks are involved in Japan.