International Business — Important Questions

Contracting local manufacturers to produce goods as per specifications

Contract manufacturing involves hiring local manufacturers in foreign countries to produce components or complete products according to specific requirements.

Foreign exchange earnings

Countries benefit from international business by earning foreign exchange, which can be used to import capital goods, technology, and other essential products.

Franchising is more specific to service businesses

While licensing and franchising are similar, franchising is typically used for service businesses and involves stricter operational guidelines.

A foreign company fully owned by a parent company

A wholly owned subsidiary is established when a parent company makes a 100% equity investment in a foreign company, giving it complete control.