What are the two main modes of entry for establishing a foreign subsidiary?

The primary modes of entry for establishing a foreign subsidiary are indeed represented by wholly owned subsidiaries and joint ventures. A wholly owned subsidiary occurs when a parent company completely owns a foreign business entity. This allows the parent company full control over operations, strategy, and decisions, providing a strong alignment with its corporate goals. This mode is particularly effective when entering markets where full control is essential to navigate regulatory environments, ensure quality, or protect proprietary technologies.

On the other hand, a joint venture involves partnering with a local firm to create a new business entity in the foreign market. This approach allows companies to share risks, leverage local knowledge, and combine resources. Joint ventures can be beneficial in markets where local expertise and established relationships are crucial for success. They also facilitate compliance with local laws that may require domestic partnerships or shared ownership structures.

In contrast, the other options primarily focus on different forms of international business strategies that may not directly lead to establishing a subsidiary. Although acquisition and partnership are related to business strategies, they don't singularly define the establishment of a foreign subsidiary as effectively as wholly owned subsidiaries and joint ventures do.