What is the primary disadvantage of using wholly owned affiliates as the means of entering a foreign market?
A)dumping
B)countertrading
C)nontariff barriers
D)costs

Question

What is the primary disadvantage of using wholly owned affiliates as the means of entering a foreign market?
A)dumping  
B)countertrading  
C)nontariff barriers  
D)costs

Quizplus · Accepted Answer

Wholly owned affiliates require significant investment and costs such as establishing a new entity, acquiring assets, building infrastructure, and hiring local employees. This can be a disadvantage compared to other modes of entry such as exporting, licensing, or franchising, which may require fewer resources and lower costs.

What Is the Primary Disadvantage of Using Wholly Owned Affiliates