Assume a domestic company in the US, let's say Colgate-Palmolive, is deciding to export to a country where to date Colgate products are not present. Which method of entry will demonstrate lower fixed costs associated?

Answer: Licensing

Explanation:

Licensing can be defined as the method of foreign operation in which a company in one country (licensor) agrees to allow a company in another country (licensee) to its manufacturing, processing, trademark, know-how or any other skill.

For example, in Zimbabwe, United Bottlers have the licence to make Coke. In this case, a certain amount will be paid to the coca cola company periodically.

The advantage of adopting the licensing method of entering a new country is that, it involves little expense and involvement. In fact, the only cost incurred is during the signing of the agreement and supervising its implementation.

agent method of entry

Explanation:

Agent method of entry will demonstrate lower fixed costs associated.