Question

Which of the following is an example of a wholly-owned subsidiary entry mode?

a. JC Penney ceasing operations in Bangladesh to outsource production from Vietnam.

b. Marriott International opting to invest $50 million in the construction of a new hotel and resort in Macau.

c. JC Penney buying the existing operations of Walmart's purchasing center in Bangalore, India.

d. Marriott International offering a local entrepreneur in Bangladesh to open a Marriott Marquis in the capital city.

Answer 1

A wholly-owned subsidiary entry mode is represented by Marriott International's investment in building a new hotel in Macau since it entails complete ownership and control by Marriott, which is not the case for outsourcing or franchising mentioned in the other options. The correct answer is option b.

Step-by-step explanation:

An example of a wholly-owned subsidiary entry mode is when a company completely owns and controls a business operation in a foreign country. Among the choices provided, option 'b. Marriott International opting to invest $50 million in the construction of a new hotel and resort in Macau' is an example of a wholly-owned subsidiary as Marriott International is investing directly in the construction of a new facility, thereby creating a business it will fully own and operate.

Other choices like outsourcing production or franchising do not represent wholly-owned subsidiary scenarios because they involve either contracting external companies to produce goods or allowing independent operators to own and run the business although it may carry the franchiser's branding.