One advantage of direct investment when entering a new global market is that
A) intermediaries have the potential to harm the brand.
B) the firm entering the foreign market does not have to pay royalties to the government.
C) the company forgoes control over its product.
D) the firm gains and uses a better understanding of local market conditions.
E) this method is likely to provide the fewest subsidies from the host country's government.

Question

Quizplus · Accepted Answer

Direct investment allows a firm to have a physical presence in the foreign market, which helps it gain a deeper understanding of local market conditions and consumer behavior, leading to better strategic decisions.

One Advantage of Direct Investment When Entering a New Global