A Coca-Cola bottling plant in Bolivia is wholly owned by a local ...

[penguins]

A Coca-Cola bottling plant in Bolivia is wholly owned by a local businessperson. What kind of venture is this plant likely to be?
 
  A) a franchise
  B) a licensed plant
  C) a foreign subsidiary
  D) a joint venture

Question 2

Of the approaches to pursuing international markets, developing a ________ involves the greatest commitment and risk.
 
  A) franchise
  B) joint venture
  C) strategic alliance
  D) foreign subsidiary

[shailee]

Answer to Question 1

Answer: B
Explanation: The plant cannot be a joint venture or foreign subsidiary because it is owned by the local businessperson. The plant is not likely to be a franchise because it is marketing a single productCoca-Colarather than an entire operation. That leaves the correct response, a licensed plant. The company has licensed the right to produce Coca-Cola to the local businessperson who has complete control of the plant.

Answer to Question 2

Answer: D
Explanation: Unlike the other three choices, a foreign subsidiary is not a partnership with an existing foreign company. Instead, a foreign subsidiary requires an organization to commit resources to build an entire facility in a foreign country. Without a partner for guidance or shared responsibility, if things go wrong the organization itself will bear all consequences of the failuremaking the subsidiary the riskiest of all four ventures.