Firms entering a market via a wholly owned subsidiary must bear all the costs and risks associated with the venture.

Question

Quizplus · Accepted Answer

When a firm enters a market through a wholly owned subsidiary, it means that the firm owns 100% of the subsidiary. This also means that the subsidiary operates independently and is responsible for bearing all the costs and risks associated with the venture. The parent company can provide financial and operational support, but ultimately, the subsidiary is responsible for its own success or failure.

Firms Entering a Market Via a Wholly Owned Subsidiary Must