Why do some companies choose to approach international growth through contract manufacturing?

(1 point)
Responses

lower labor costs

lower labor costs

new markets to sell

new markets to sell

royalty fees

royalty fees

diverse holding options

1 answer

Some companies choose to approach international growth through contract manufacturing primarily for the reason of lower labor costs. Contract manufacturing allows companies to reduce production expenses by leveraging cheaper labor and resources available in different countries, which can significantly improve their profit margins and competitiveness in the global market.