disadvantage wholly owned subsidiaries mode entry foreign markets quizlet

What is one disadvantage of wholly owned subsidiaries as a mode of entry into foreign markets quizlet?

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1. Exporting - a common first step for many manufacturing firms
->later, firms may switch to another mode

2. Turnkey projects - the contractor handles every detail of the project for a foreign client, including the hiring and training of operating personnel
->at completion of the contract, the foreign client is handed the "key" to a plant that is ready for full operation (hence the name turnkey)

3. Licensing - a licensor grants the rights to intangible property to the licensee for a specified time period, and in return, receives a royalty fee from the licensee
->patents, inventions, formulas, processes, designs, copyrights, trademarks

4. Franchising - a specialized form of licensing in which the franchisor not only sells intangible property to the franchisee but also insists that the franchisee agree to abide by strict rules as to how it does business
->used primarily by service firms (like McDonalds)

5. Joint ventures with a host country firm - a firm that is jointly owned by two or more otherwise independent firms
->most joint ventures are 50-50 partnerships

6. Wholly owned subsidiary - the firm owns 100 percent of the stock
->set up a new operation (greenfield venture)
->acquire an established firm (acquisition)

What is one disadvantage of wholly owned subsidiary as a mode of entry into foreign markets?

Which of the following is a disadvantage of wholly owned subsidiaries as a mode of entry into foreign markets? Foreign firms must bear the full capital costs and risks of setting up overseas operations.

What is a disadvantage of a wholly owned subsidiary quizlet?

THE ADVANTAGES OF WHOLLY OWNED SUBSIDIARIES INCLUDE TIGHT CONTROL OVER TECHNOLOGICAL KNOW-HOW. THE MAIN DISADVANTAGE IS THAT THE FIRM MUST BEAR all the costs and risks of opening a foriegn market.

What are two disadvantages of operating a wholly owned subsidiary quizlet?

Disadvantages include the risk of losing control over technology and a lack of tight control. The advantages of wholly owned subsidiaries include tight control over technological know-how.

Which of the following is an advantage of wholly owned subsidiaries quizlet?

Which of the following is an advantage of wholly owned subsidiaries? They are the least expensive investment entry modes.

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