Why are wholly owned subsidiaries preferred by firms pursuing global or transnational strategies?
A) They are more challenging
B) They are less costly than other modes
C) They allow the use of profits generated in one market and improve the competitive position in another
D) They allow for easier management and transitions
E) they increase the value of the firm more

Question

Quizplus · Accepted Answer

Wholly owned subsidiaries allow the parent company to use profits generated in one market to improve their competitive position in another market. This is particularly beneficial for firms pursuing global or transnational strategies as they aim to maximize their presence and influence across multiple markets. Additionally, having full ownership and control over the subsidiary allows for easier management and transitions. While wholly owned subsidiaries may not necessarily be less costly or more challenging, they do contribute to increasing the overall value of the firm.

Why Are Wholly Owned Subsidiaries Preferred by Firms Pursuing Global