Answer:
It is a way of reducing the risk and cost of operating in a foreign country. They will avoid hassles involved in international distribution and would not need to develop distribution networks.
Explanation:
Companies often use local intermediaries when they want to sell products and run operations in a foreign country.
A major reason for this is to avoid the cost of developing distribution channel from scratch. The intermediaries already have the distribution network so it is an easier option.
Also local intermediaries have the know-how to operate in the foreign country. This includes knowledge on how to access resources cheaply, sourcing for low cost labour, and navigating the political environment.
Costs such as tariffs and custom duties paid dusting international distribution are also avoided by using local intermediaries.
