Question

When host country customers prefer to deal with a local​ factory, which form of foreign market entry is​ preferred?

a) Exporting
b) Licensing
c) Joint Venture
d) Wholly Owned Subsidiary

Answer 1

When host country customers prefer to deal with a local factory, a Wholly Owned Subsidiary is the preferred form of foreign market entry.

Step-by-step explanation:

When host country customers prefer to deal with a local factory, the form of foreign market entry that is preferred is a Wholly Owned Subsidiary. A wholly owned subsidiary is a company that is fully owned by a foreign parent company. By establishing a wholly owned subsidiary, the foreign parent company has complete control over its operations and can cater to the preferences of the host country customers.

For example, if a host country customer prefers to deal with a local factory, a foreign company can set up a wholly owned subsidiary in that country. This allows the company to establish a local presence and operate the factory directly, addressing the preferences of the host country customers.