To enter markets where superior profits are possible, an MNC should do which of the following? a. establish a subsidiary or acquire a competitor in a new market. b. acquire a competitor that has controlled its local market. c. establish a subsidiary in a market where tougher trade restrictions will adversely affect the firm's export volume. d. establish subsidiaries in markets whose business cycles differ from those where existing subsidiaries are based.

Question

Business

Clarence Herrera

26 March, 07:40

To enter markets where superior profits are possible, an MNC should do which of the following? a. establish a subsidiary or acquire a competitor in a new market. b. acquire a competitor that has controlled its local market. c. establish a subsidiary in a market where tougher trade restrictions will adversely affect the firm's export volume. d. establish subsidiaries in markets whose business cycles differ from those where existing subsidiaries are based.

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Emilee Calhoun · Answer 1

a. establish a subsidiary or acquire a competitor in a new market

Explanation:

In the market where superior profits are possible to be generated, MNC should establish its subsidiary or acquire competitor. This is because in the home market, it has already been saturated or the competition is intense. so that need to penetrate into new market to seek for potential demand. So that MNC can choose either setting up subsidiary or acquiring competitors to achieve the objectives of different sources of demand available to exploit.