What is the term for private-label manufacturing by a foreign company?

What is the term for private-label manufacturing by a foreign company?

• A. Joint venture leasing
• B. Contract manufacturing
• C. Outsourcing
• D. Franchise manufacturing

Answer: (B)

The term for private-label manufacturing by a foreign company is contract manufacturing. This concept involves one company producing goods on behalf of another company, often allowing for a tailored product that meets the specifications of the brand contracting the production. The primary advantage of contract manufacturing is that it enables companies to focus on their core competencies, such as branding and marketing, while outsourcing the production process to specialized manufacturers who may offer more affordable or efficient production capabilities. In the context of private-label goods, this means that a company can sell products manufactured by another firm under its own brand name, allowing for a wider range of product offerings without the need to invest in the manufacturing infrastructure. This approach is commonly used in industries like consumer electronics, clothing, and food products, where a brand seeks to deliver customized items to the market without the burdensome costs of setting up their own factories. The other options represent different business arrangements that don’t specifically refer to the private-label manufacturing context: joint venture leasing pertains to shared ownership and operations, outsourcing generally relates to delegating tasks or services, and franchise manufacturing involves a brand licensee producing and selling products under a brand’s name within a franchising framework.

The term for private-label manufacturing by a foreign company is contract manufacturing. This concept involves one company producing goods on behalf of another company, often allowing for a tailored product that meets the specifications of the brand contracting the production. The primary advantage of contract manufacturing is that it enables companies to focus on their core competencies, such as branding and marketing, while outsourcing the production process to specialized manufacturers who may offer more affordable or efficient production capabilities.

In the context of private-label goods, this means that a company can sell products manufactured by another firm under its own brand name, allowing for a wider range of product offerings without the need to invest in the manufacturing infrastructure. This approach is commonly used in industries like consumer electronics, clothing, and food products, where a brand seeks to deliver customized items to the market without the burdensome costs of setting up their own factories.

The other options represent different business arrangements that don’t specifically refer to the private-label manufacturing context: joint venture leasing pertains to shared ownership and operations, outsourcing generally relates to delegating tasks or services, and franchise manufacturing involves a brand licensee producing and selling products under a brand’s name within a franchising framework.