Subsidiary

• Companies that truly want to commit to exporting to a market form a subsidiary.
  • Subsidiaries are usually formed after market success has been achieved by other methods.

• Subsidiaries offer the following advantages:
  • Control over:
    • Quality
    • Service
    • Marketing
    • Sales and ditribution
  • Potentially highest profit margins
  • A closer relationship to the overseas market

• Subsidiaries offer the following disadvantages:
  • Greatest commitment
    • Is upper management committed to opening a foreign subsidiary?
    • Is upper management understand the risks and the resources required to open a foreign subsidiary?
    • Does opening a subsidiary fit into your company's short, medium, and long-term goals?
  • Greatest investment
    • Capital
    • Legal
    • Human Resources

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https://pierobon.org/export/ch3/sub.htm

© 2004 John Michael Pierobon

Notes