Erna Boogard bakes cakes for a living. Her recipes were so popular in The Netherlands that her company has grown dramatically. She has just sold the right to manufacture her cakes to to firms in Canada and the US. Which of the following ways of entering into the global marketplace is Erna's company using?

a.Licensing

b. Franchising

c. Exporting

d. Joint Ventures

Licensing is contractual transaction where the company (licensor) offers some proprietary assets to foreign company (licensee) in exchange for royalty fees .

Licensing is considered a low involvement and low-control entry strategy, since it does not necessarily entail equity participation, and because control over operations and strategy is granted to the licensee in exchange for a lump-sum payment, and a commitment to abide by any terms set out in the licensing contract.

Option (B) True.

A franchise agreement is a contractual arrangement between two independent firms, whereby the franchisee pays the franchisor for the right to sell the franchisor's product and/or the right to use the franchisor's trademark at a given place and for a certain period of time.

Franchisors typically offer managerial assistance and exercises substantial control over the franchisee.

Option (C) False

Exporting- here the company becomes directly involved in marketing its products in foreign markets. Although the associated cost and risks are greater, so are the profits too ,all things being equal.

Option (D) False

This is when two or more independent companies create a separate entity but still still maintain their former entity . As a penetration strategy, it does not only reduced risks but also decreases individual involvement.

It can also be used to eliminate risk of entry barriers for a new entrant in an existing market.