Which of the Following Is a Disadvantage of Wholly Owned

question 111

Multiple Choice

Which of the following is a disadvantage of wholly owned subsidiaries as a mode of entry into foreign markets?

• A) Foreign firms find it difficult to maintain control over how their technological know-how is used.
• B) Foreign firms cannot use profits earned in one country to support competitive attacks in another.
• C) Foreign firms tend to have short-term commitments in the foreign market.
• D) Foreign firms cannot realize substantial experience curve and location economies.
• E) Foreign firms must bear the full capital costs and risks of setting up overseas operations.

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Definitions:

Aboveground

Pertaining to or situated on the surface of the earth; not underground or underwater.

Sexual Spore

A reproductive structure in fungi and some plants formed by the fusion of two distinct parent cells, leading to genetic recombination and variation.

Club-Shaped

A term describing an object, organ, or structure that is broader or round at one end and tapers towards the other end, similar to the shape of a club.

Basidia

Specialized spore-producing cells found in the reproductive structures of basidiomycete fungi.