When a firm’s competitive advantage is based on technological competen

QUESTION

When a firm’s competitive advantage is based on technological competence, a joint venture is the preferred mode of entry into a foreign market because it reduces the risk of losing control over that competence.

Indicate whether the statement is true or false.

ANSWER

FALSE
When a firm’s competitive advantage is based on technological competence, a wholly owned subsidiary will often be the preferred entry mode because it reduces the risk of losing control over that competence. Many high-tech firms prefer this entry mode for overseas expansion