Companies can avoid some of the disadvantages posed by partnering with other firms by setting up wholly-owned subsidiaries in the target markets.

Question

Quizplus · Accepted Answer

Companies can avoid some of the disadvantages posed by partnering with other firms by setting up wholly-owned subsidiaries in the target markets. The assumptions behind a wholly-owned subsidiary are that: the company can afford the costs involved in setting up a wholly-owned subsidiary, the company is willing to commit to the market in the long term, and the local government allows foreign companies to set up wholly-owned subsidiaries on its territory.

Companies Can Avoid Some of the Disadvantages Posed by Partnering