Question

In what ways is exporting a better way of entering international markets than setting up wholly owned subsidiaries abroad.

Answer 1

Answer:

Exporting a better way of entering international markets than setting up wholly owned subsidiaries abroad because :  

(1) In the case of export , company can export goods direct or indirect as the case may be, but it is not possible in the case of setting up wholly owned subsidiaries abroad.

(2) Benefit of product differentiation is comparatively much possible in case of exporting then wholly owned subsidiaries unit.

(3) Requirement of capital is comparatively less in case of exporting.

(4) If condition are not favourable, company can stop the exporting but it is not so easy to close any wholly owned subsidiaries unit.

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