Whats the point of subsidiaries?

Subsidiary DLC for Capitalism Lab
klasanov
Level 4 user
Posts: 116
Joined: Wed Jan 22, 2014 2:54 am

Re: Whats the point of subsidiaries?

Post by klasanov »

So the AI is able to manage things fairly well.

I just recenty retired from a game where i had comm devices, electronics, and photography. HUD glasses came out and i made a sub to market those. A little cash infusion and building and tech set up and one less product to worry about.

More broadly, you can do this with other product classes. Say you run beverages and want to expand into automobiles. You dont have the expertise and your cto and coo slots are filled. Create a sub and hire a CEO with automobile experience. It looks like you can still run research and development under the sub as needed.

This gives you leverage to compwte with an AI who just is able to market everything
Yacal
Level 2 user
Posts: 25
Joined: Sun Oct 25, 2015 1:40 am

Re: Whats the point of subsidiaries?

Post by Yacal »

anjali wrote:
Abefar wrote:
What do you use them for? Why would i even use them? Why not keep everything in one company?

Please enlightment me :)
you can double loan on your assets ( take loans with your subsidiary on its assets, and as the assets are also assets of your parent company you can loan out on it too, but if subsidiary is a listed public company, you cna loan out on the market value which can be 10 times the actual net value) this can speed up rour growth extremely.
hey, as my english is not perfect I do not understand what do you exactly mean here, can you explain to me please?
beamthegreat
Level 3 user
Posts: 89
Joined: Mon Oct 02, 2017 10:32 pm

Re: Whats the point of subsidiaries?

Post by beamthegreat »

Yacal wrote: Mon Sep 11, 2017 6:49 am
anjali wrote:
Abefar wrote:
What do you use them for? Why would i even use them? Why not keep everything in one company?

Please enlightment me :)
you can double loan on your assets ( take loans with your subsidiary on its assets, and as the assets are also assets of your parent company you can loan out on it too, but if subsidiary is a listed public company, you cna loan out on the market value which can be 10 times the actual net value) this can speed up rour growth extremely.
hey, as my english is not perfect I do not understand what do you exactly mean here, can you explain to me please?
If you start a new game and have $50 mil in your company with no debt, you can borrow another $50 mil to start a new subsidiary with $95 mil (need to reserve some cash to pay interest), and use your subsidiary to borrow another $95 mil.

Your company will have $5 million in cash, and your subsidiary will have $190 million in cash, which is not possible without using subsidiaries.


I find subsidiaries to be very useful in setting up a very profitable retail firm without having to micro-manage. Simply choose a CEO with 100 expertise points in retailing, set up 5-10 departments and 5-10 convenience stores in every city, depending on the number of available seaports (more seaport allows for more stores). Be sure to have at least 30 customer traffic points, and you should generate around 20-50% in ROA even in the most difficult setting. Works every single game.

Also, most CEOs tend to manage telecom quite well, which is quite useful if you're playing long games since there is no option to adjust internet prices with inflation.
LOLCL
Posts: 3
Joined: Fri Mar 03, 2023 2:17 am

Re: Whats the point of subsidiaries?

Post by LOLCL »

Personally, I find that when I play it's way too easy to expand into too many industries in effort to compete with the AI. The AI works on the level that if there's no competition in a sector, it excels, but once there is competition it certainly falters. At least on lower difficulty. So subsidiaries are basically made to compete with the AI in these sectors while you focus on your main one.

For instance, I wanted to be focused on being a leading edge tech company. So I split up everything that wasn't related to that and gave it to subsidiaries. As well, you can set up subsidiaries simply for competition.
LOLCL
Posts: 3
Joined: Fri Mar 03, 2023 2:17 am

Re: Whats the point of subsidiaries?

Post by LOLCL »

Personally, I find that when I play it's way too easy to expand into too many industries in effort to compete with the AI. The AI works on the level that if there's no competition in a sector, it excels, but once there is competition it certainly falters. At least on lower difficulty. So subsidiaries are basically made to compete with the AI in these sectors while you focus on your main one.

For instance, I wanted to be focused on being a leading edge tech company. So I split up everything that wasn't related to that and gave it to subsidiaries. As well, you can set up subsidiaries simply for competition.
Nanocar
Posts: 1
Joined: Sun Jun 18, 2023 5:49 pm

Re: Whats the point of subsidiaries?

Post by Nanocar »

The main benefit of subsidiary companies is that they are different legal entities from their parent company. This means the two companies can limit shared liabilities or obligations and will be separate in terms of regulation or tax.








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