Answer:
It allows firms to use the profits generated in one market to improve its competitive position in another market.
Explanation:
A wholly owned subsidiary is a business related term that describes a company whose entire stock that is, 100% stock is held by another company, specifically referred to as the parent company. For example, American Airlines is a wholly owned subsidiary of AMR Corp.
Therefore, firms pursuing global standardization or transnational strategies often prefer establishing wholly owned subsidiaries because it allows the firm the ability to use the profits generated in one market to improve its competitive position in another market.
