The entry strategy that requires the highest levels of investment and exposes firms to significant risks is:

Question

Quizplus · Accepted Answer

direct investment involves establishing wholly-owned subsidiaries or acquiring existing firms in foreign markets. This requires significant financial resources and exposes firms to a high level of risks, such as political instability, cultural differences, and the possibility of expropriation. In contrast, other entry strategies like franchising, licensing, joint ventures, and strategic alliances may require less investment and are less risky. Therefore, direct investment is the most challenging and resource-intensive way for firms to enter international markets.

The Entry Strategy That Requires the Highest Levels of Investment