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Imagine that you are operating a Chinese clothing retail chain and you wish to enter the Italian market in order to access the latest fashion designs and trends from Italy. To meet this goal, it is important
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Imagine that you are operating a Chinese clothing retail chain and you wish to enter the Italian market in order to access the latest fashion designs and trends from Italy. To meet this goal, it is important to have strong control and coordination of your Italian operations and to be able to easily transfer tacit knowledge back to China. Based on this information what entry mode would you choose to enter Italy?

a. Wholly owned subsidiary
b. Exporting
c. Franchising
d. Strategic alliance
e. Licensing

User Satya Prakash Dash
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1 Answer

12 votes
12 votes

Answer: a. Wholly owned subsidiary

Step-by-step explanation:

The only method listed that would give you strong control and coordination of the new business in Italy is that of a wholly owned subsidiary. You would have a 100% control over such a company and could do what you wanted with it including transferring knowledge back to China without impediment.

Exporting provides little control. Franchising provides limited control. Strategic alliance means that you have to share control with another entity and licensing provides only limited control as well.

User Dajee
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