Firms entering a market via a wholly owned subsidiary must bear all the costs and risks associated with the venture. This is a major disadvantage for the firm to bear all the loss alone and take all the risks.
What is a venture in business?
A commercial or other speculation: a business enterprise or speculation in which anything is staked in the prospect of profit: one may now order their products online, thanks to their newest initiative.
A sum of money, a ship, cargo, merchandise, or something similar on which a business or speculative takes a risk.
Thus, wholly owned subsidiary is has to bear the loss solely.
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