Question

​Firms that want to become involved in licensing or to become heavily involved in global marketing may engage in contract manufacturing.

a. True
b. False

Answer 1

Answer:

A) True

Explanation:

If a firm wants to expand globally, and enjoy an important market share in different countries, it should consider contract manufacturing.

Contract manufacturing simply consists in outsourcing part of the manufacturing process to a third party in another country. Most big companies in the world make use of contract manufacturing to expand, and take advantage of comparative advantages in other nations (for example, lower labor or raw materials costs).