Which of the following is an advantage of turnkey projects as a mode of entry into foreign markets?
A) It helps create competition which in turn increases the quality of production.
B) It can be less risky than conventional FDI.
C) It is an ideal way to establish a long-term presence in a foreign country.
D) It helps protect the competitive advantage of process technology.
E) The firm that enters into a turnkey project with a foreign enterprise avoids giving rise to potential competitors.

Question

Quizplus · Accepted Answer

Turnkey projects can be less risky than other modes of entry, such as joint ventures or wholly owned subsidiaries, because the risks and costs are shared with the local partner. The local partner is responsible for managing the project and absorbing any potential losses. However, this mode of entry may not be a good long-term strategy as it does not establish a permanent presence in the foreign market.

Which of the Following Is an Advantage of Turnkey Projects