Question:
"Wholly owned subsidiary is a more investing, more risky and less return giving venture."Do you agree? Substantiate your answer.
Answer:
I agree to the statement partially. Wholly owned subsidiary is a more investing, more risky and more return giving venture. In this the parent company acquires the full control over the foreign company by purchasing its 100% equity capital. It can be established in two ways: first as a green field venture, in which an altogether a new firm is set up to start operations in a foreign existing firm in foreign country and using it for manufacturing and promoting its products in home country.
Merits of Wholly Owned Subsidiaries
- Complete control over operations: The parent firm is able to exercise full control over its operations in foreign countries because it has 100% equity holding in the company.
- No need to disclose technology: It is less risky as 100% investment is made by parent company and hence there is no need to disclose technology to local producers.
Demerits of Wholly Owned Subsidiaries
- 100% Investment and hence require more funds: The parent company needs to make 100% equity investment and therefore requires huge funds.
- More risky: It is more risky as parent company has 100% equity investment; it has to bear all the losses, if any.
- Government rules and regulations: Some countries do not allow establishing 100% wholly owned subsidiaries in their countries.
International Business I
Q 1.
What is the share of India's exports in world exports?
Q 2.
Which mode of international business should be chosen by a small business man and why?
Q 3.
Explain different forms of Joint Ventures.
Q 4.
What are the major items that are exported from India?
Q 5.
Reebok orders for footballs to local manufacturers of Ludhiana and then sells it all over the world. It is an example of what?
Q 6.
Discuss the scope of international business.
Q 7.
Discuss as to why nations trade.
Q 8.
State the important changes being observed in composition of India's external trade since 2007-08.
Q 9.
What are the benefits of international trade to firms?
Q 10.
List the major countries with whom India trades.
Q 11.
Discuss the merits and demerits of entering into joint ventures.
Q 12.
Discuss meaning, merits and demerits of contract manufacturing.
Q 13.
India is_largest economy in the world.
Q 14.
Discuss any three advantages of international business.
Q 15.
When a middleman is involved in handling export procedure, then it is called by what name?
Q 16.
Licensee or franchisee pays a fee to licensor or franchisor. What is it called?
Q 17.
"International trade benefits both the parties involve."Do you agree? Justify your answer:
Q 18.
Which service has got dominating share in foreign trade in services?
Q 19.
Discuss the major trends in India's foreign trade. Also list the major products that India trades with other countries.
Q 20.
What is the basic reason behind international trade?
Q 21.
How is home trade different from external trade?
Q 22.
Write a short note on India's foreign investments.
Q 23.
List major items of India's import.
Q 24.
Why is it said that licensing is an easier way to expand globally?
Q 25.
"Foreign trade is not free from difficulties."Comment.
Q 26.
What is the major reason under lying trade between nations?
Q 27.
Give one point of difference between licensing and franchising.
Q 28.
Name the country whose share is largest in India's exports and imports.
Q 29.
Out of international trade and international business which one is wider in scope?
Q 30.
Discuss meaning, merits and demerits of contract manufacturing.
Q 31.
India embarks on the path of globalisation. Comment
Q 32.
Enumerate limitations of contract manufacturing.
Q 33.
Discuss the benefits of international business.
Q 34.
What benefits do firms derive by entering into international business?
Q 35.
"International business is more than international trade". Comment.
Q 36.
In what ways is exporting a better way of entering into international markets than setting up wholly owned subsidiaries abroad.
Q 37.
"Wholly owned subsidiary is a more investing, more risky and less return giving venture."Do you agree? Substantiate your answer.
Q 38.
Discuss briefly the factors that govern the choice of mode of entry into international business.
Q 39.
Explain different forms of contract manufacturing.
Q 40.
Define international business.
Q 41.
Differentiate between international trade and international business.
Q 42.
What is invisible trade? Discuss salient aspects of India's trade in services.
Q 43.
Differentiate between contract manufacturing and setting up wholly owned production subsidiary abroad.
Q 44.
Distinguish between licensing and franchising.
Q 45.
What is international business? How is it different from domestic business?
Q 46.
Licensing and franchising are suitable in different situations. Explain how?
