The most important advantage that a wholly-owned subsidiary can provide is
A)a relative control of all company operations in the target market.
B)a decreased risk for the parent company.
C)local marketing expertise.
D)increased influence and lobbying power with the local government.

Question

Quizplus · Accepted Answer

The most important advantage that a wholly-owned subsidiary can provide is a relative control of all company operations in the target market. In particular, a subsidiary offers the company control over how to handle revenue and profits. A wholly-owned subsidiary actually increases the risk for the parent company. Wholly-owned subsidiaries may produce local marketing expertise and also provide some influence with the local government, but a joint venture can also do this and in many cases can better perform these functions.

The Most Important Advantage That a Wholly-Owned Subsidiary Can Provide