Derrido Is an American Firm That Has Produced Several Successful

question 225

Short Answer

Derrido is an American firm that has produced several successful animated TV series in the United States. It is considering contracting with one or more international companies as a way to market its products overseas.
One of Derrido's sales executives suggests that Derrido's particular type of business enables a contractual relationship to be an especially suitable way for the company to market its products internationally. Which of the following, if true, would strengthen this position?
Contractual relationships allow an originating firm to make the most use of local talent.
Contractual relationships cannot capture unpredictable future contingencies.
Contractual relationships are often cross-culturally contentious.
Derrido would not be undertaking large-scale production or shipping operations.
Derrido is a large company with ample staff and resources at its disposal.

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Definitions:

Price-leadership Model

A market strategy where one leading company sets the price for goods or services, and others in the industry follow suit.

Dominant Firm

A company that has a major share of total sales in a particular market, giving it significant control over market prices and competition.

Oligopoly

A market structure characterized by a small number of firms controlling a large majority of the market share, leading to limited competition.

Dominant Price Leader

A firm that has the biggest market share in an industry and whose price changes are usually followed by other firms in the market.