Entry modes - Wholly owned subsidiaries
9 important questions on Entry modes - Wholly owned subsidiaries
What is wholly owned subsidiaries?
Aquisitions are not easy why?
- Pre- and post integration obstacles
- Purchase price premium
Why do managers engage in M&A?
- Topline obsession
- Stock price exploitation
- Grooved thinking
- Herd behavior
- Personal commitments
- Trust in interested parties
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What is a greenfield investment?
What is a brownfield investment?
What are the advantages of a greenfield investment?
- Can exert higher level of control over subsidiary
- Allows for incremental investments
What are the disadvantages of a greenfield investment?
What are the advantages of a brownfield investment?
- The acquired firm can have resources that are valuable to the MNE
- can help overcome weak location institutions
What are the disadvantages of a brownfield investment?
- Confilcts over restructuring
- Somewhat less control than with greenfield
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