The most risky method(s) by which firms conduct international business is (are):
A) Franchising.
B) The acquisitions of existing operations.
C) The establishment of new subsidiaries.
D) All of the above
E) B and C only

Question

Quizplus · Accepted Answer

Acquiring existing operations and establishing new subsidiaries are the most risky methods by which firms conduct international business. These methods involve a high level of investment and commitment to developing new business relationships in foreign markets. Franchising, on the other hand, involves less risk, as the franchisor provides the franchisee with support and brand recognition. However, even franchising can be risky if the franchisee does not operate the business in accordance with the franchisor's standards. Therefore, options B and C are considered to be the riskiest methods of conducting international business, while franchising (option A) is less risky. Therefore, option E, which includes only options B and C, is the best choice.

The Most Risky Method(s) by Which Firms Conduct International Business