question 7\npepsi - cola has entered into a long - term contract with a south african beverage business. the…

question 7\npepsi - cola has entered into a long - term contract with a south african beverage business. the contract calls for the south african firm to produce and market pepsi - cola in south africa. pepsi will receive a royalty on each case of soda sold. this is an example of ________.\nlicensing\njoint venture\ndirect trade\nforeign subsidiary

question 7\npepsi - cola has entered into a long - term contract with a south african beverage business. the contract calls for the south african firm to produce and market pepsi - cola in south africa. pepsi will receive a royalty on each case of soda sold. this is an example of ________.\nlicensing\njoint venture\ndirect trade\nforeign subsidiary

Answer

Brief Explanations:

Licensing is an agreement where a company (licensor) allows another company (licensee) to use its intellectual property (like brand name, formula etc.) in exchange for royalties. Here Pepsi - Cola allows a South African firm to produce and market its product in South Africa and receives royalties, which is a key characteristic of licensing. A joint - venture involves two or more companies coming together to form a new entity. Direct trade is about the direct exchange of goods between parties without such a licensing - royalty relationship. A foreign subsidiary is a company that is owned or controlled by a foreign parent company, which is not the case here.

Answer:

licensing