Jupiter Systems is a high-tech firm looking to set-up operations in a foreign country to profit from a core competency in its technological know-how.Which of the following modes of entry would be most favorable to the firm if it wants to keep a tight control over its technology?
A)Wholly owned subsidiary
B)Joint venture
C)Franchising
D)Licensing

Question

Quizplus · Accepted Answer

If a firm's competitive advantage (its core competence)is based on control over proprietary technological know-how,licensing and joint-venture arrangements should be avoided if possible to minimize the risk of losing control over that technology.Thus,if a high-tech firm sets up operations in a foreign country to profit from a core competency in technological know-how,it will probably do so through a wholly owned subsidiary.

Jupiter Systems Is a High-Tech Firm Looking to Set-Up Operations