Scenario - Boseman Clothier, Inc

Multiple Choice

Scenario - Boseman Clothier, Inc. Boseman Clothier, Inc. has been in operation for over 75 years.  It is based in South Carolina, USA and is a well-recognized name in the industry.  It produces custom fitted men's suits that are in high demand throughout the world.  The average cost of one of its suits is in excess of five thousand U.S. dollars.  Boseman proudly states it has more customer orders than its one store can fill within the next six months.  With growing demand from overseas, the company has recently decided to open operations in four foreign markets next year. Boseman realizes the potential of this move will generate increased revenues for the company.  One of the options it is contemplating is exploring forming an international joint venture.  Boseman is also entertaining the thought of opening operations differently in each of the four new foreign markets.  The company feels the use of different strategies may increase its odds of generating profits in each different market. Boseman Clothier, Inc. has indicated it would like to use different entry strategies for each of the four markets it plans to enter.  Which of the following would not be considered a benefit from using licensing in the other foreign markets it plans to enter?

A) This type of relationship is expected to last for years so there must be a high level of trust between the companies involved
B) Boseman will be subjected to the least amount of risk with this type of entry into a foreign market
C) Boseman is expected to provide the foreign partner with the process necessary to produce its highly desired suits
D) Boseman's partner is expected to pay an annual license fee to the company for the use of its production process and the ability to sell its products
E) Boseman does not have to have financial resources to open new production facilities within the foreign country