Updated: Nov 8, 2022
Full-fledged manufacturers may be responsible for various tasks, including production planning, input procurement, supply chain management, quality control, long-term capacity utilisation planning, and possibly even selling to third-party clients.
Product responsibility, warranty, capacity utilisation, market demand, and pricing risks are some of the risks associated with the operations of a full-fledged manufacturer who holds (non) routine intangibles.
A manufacturer who is also an entrepreneur may also be involved in significant research and development activities. In this case, the manufacturer assumes the risks associated with creating, maintaining, and protecting valuable intangible property that may result from research and development activities.
For instance, in a simplified model with one entrepreneurial entity and many non-entrepreneurial businesses that make up the value chain of an MNE group.
Non-entrepreneurial entities, such as limited-risk entities, generate returns on regular functions. The full-fledged manufacturer/entrepreneur receives all residual profits or losses from the value chain.
If there are group losses, the manufacturer entrepreneur will incur all group losses,
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