Fredora Design House wants to enter the foreign market. However, as its designs are its intellectual property, it does not wish to risk its authority to have complete control over the sales and marketing of its products in a foreign nation. Which of the following forms of entering a foreign market should Fredora choose in this scenario such that there is a reduced risk of valuable information being leaked to competitors, thereby enabling a business partner from becoming a future competitor?
A) Turnkey operation
B) Franchising
C) Joint venture
D) Wholly owned subsidiary

Question

Quizplus · Accepted Answer

A wholly owned subsidiary allows Fredora Design House to maintain complete control over its operations, including sales and marketing, in a foreign market. This structure minimizes the risk of intellectual property leakage and prevents business partners from becoming competitors, as the parent company retains full ownership and authority.

Fredora Design House Wants to Enter the Foreign Market