A U.S. manufacturer of computer chips wants to produce some of its chips in Japan. The U.S. company wants to do this with as little financial investment and risk as possible. It also does not want to be actively involved with the Japanese company. Which expansion method should the U.S. company use?

Question

A U.S. manufacturer of computer chips wants to produce some of its chips in Japan. The U.S. company wants to do this with as little financial investment and risk as possible. It also does not want to be actively involved with the Japanese company. Which expansion method should the U.S. company use?
	a. franchising	
	b. international partnership	
	c. licensing	
	d. joint venture

GPT-4o mini · Answer

Given the U.S. manufacturer's desire to produce chips in Japan with minimal financial investment and risk, and without active involvement in the operations, the best expansion method would be c. licensing.

Licensing allows the U.S. company to grant rights to a Japanese firm to produce and sell chips, enabling the U.S. company to leverage the local company's expertise and resources without the need for significant investment or involvement in the day-to-day operations. This method minimizes both financial commitment and operational risk.