Which of the following is an advantage of turnkey projects as a mode of entry into foreign markets?
A)It is an ideal way to gain entry into a country where FDI is not limited by government regulations.
B)It is a useful strategy to earn great returns from the know-how of a technologically complex process.
C)It is an ideal way to establish a firm's long-term presence in a foreign country.
D)It helps protect a firm's competitive advantage.
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 allow a firm to earn returns from the know-how of a technologically complex process, without having to invest in long-term presence in a foreign market. This is especially advantageous when FDI is limited by government regulations or when the firm wants to avoid potential competitors. However, turnkey projects do not necessarily protect a firm's competitive advantage in the long term, as the knowledge and expertise gained through the project may be transferred to local competitors. Additionally, turnkey projects do not establish a firm's long-term presence in a foreign country.

Which of the Following Is an Advantage of Turnkey Projects