Scenario: Blickinstock at the Crossroads
Auto parts supplier,Blickinstock Ltd. ,would like to expand its presence in Latin America.To that end,Blickinstock is trying to decide whether to purchase an existing company in a remote region of Argentina or build its own subsidiary.Keith Moon,Blickinstock's vice president of global business development,will be making a presentation to the board outlining the company's options.
-Which of the following is the LEAST likely reason why Blickinstock should consider building its own subsidiary?
A)The company may inherit obsolete equipment if it goes ahead with the purchase.
B)Blickinstock may find relations are poor with workers at the proposed acquisition.
C)The proposed acquisition is located in a somewhat unsuitable location because of its remoteness.
D)Workers at the existing facility are qualified to undertake Blickinstock's production tasks.

Question

Quizplus · Accepted Answer

The fact that workers at the proposed acquisition are qualified to undertake Blickinstock's production tasks is a reason why Blickinstock should consider purchasing the existing company, rather than building its own subsidiary. Therefore, it is the least likely reason why Blickinstock should consider building its own subsidiary. Obsolete equipment, poor worker relations, and an unsuitable location are all potential risks associated with purchasing an existing company, which could make building a new subsidiary a more attractive option.