In 2017, Soda Stereo, a small Argentinean firm, started producing a sound system that, attached to mobile phones, improves the quality of sound in a 50% compared to the next best technology available. Global sales of the sound system increased rapidly. After only a few months since initial production, the sound system was exported to countries in three different continents. Soda Stereo international sales continued to grow uninterruptedly over the years and are expected to keep growing in the future, making the company a successful multinational.
Refer to Case study Soda Stereo.
Soda Stereo has been presented with two alternative approaches to grow its international sales. The two approaches are either partnering with an agent or a foreign distributor. Which of the following, if true, would most support Soda Stereo’s decision to partner with an agent, as opposed to a foreign distributor to increase foreign sales?
Select one:
a.
The market price of Soda Stereo’s product is too low to support payment of commissions
b.
The biggest foreign distributors of sound systems have strong track records of success
c.
Soda Stereo’s managers do not like the idea of having foreign partners taking ownership of their products and prefer representatives
d.
The markets that Soda Stereo is planning to target for its international expansion do not offer much historical data of relative success of agents and distributors of sound systems