Differentiate between contract manufacturing and setting up wholly owned production subsidiary abroad.

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Solution

Contract manufacturing refers to a type of international business a firm enters into a contract with one or a few local manufacturers in foreign countries to get certain components or goods produced as per its specifications while in a wholly owned subsidiary the parent company acquires full control over the foreign company by making 100% investment in its equity capital.

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Similar questions

Differentiate between contract manufacturing and setting up wholly owned production subsidiary abroad.

In what ways is exporting a better way of entering into international markets than setting up wholly owned subsidiaries abroad?

Which one of the following modes of entry permits greatest degree of control over overseas operations?

(a) Licensing/franchising

(b) Wholly owned subsidiary

(d) Joint venture

In what ways are exporting/importing better than setting up wholly owned subsideries abroad?

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