Types of Manufacturing Relationships in International Business

Joint ventures involve majority ownership by the international firm to control the venture.

Management contracts in manufacturing involve production of goods by the mother company.

Wholly-owned plants in foreign countries do not require any local ownership.

Exporting as a strategy involves setting up physical operations in the foreign markets.

Contract manufacturing often involves a local firm manufacturing products for a foreign market under a contract with an international company.

Management contracts in manufacturing are mainly focused on exporting goods directly to foreign markets.

Exporting allows a company to enter foreign markets with a minimum change in product lines, company organization, investment or company vision.

One of the advantages of exporting is reducing domestic competitiveness.

Exporting helps in stabilizing seasonal market fluctuations.

Exporting does not offer any potential for corporate expansion.

Exporting always results in increased administrative costs.

Exporting requires companies to wait longer for payments compared to selling domestically.