Final answer:
The most expensive and risky entry mode is a wholly owned subsidiary, which involves full ownership and control over a foreign operation, requiring significant capital investment and involving high risk.
Step-by-step explanation:
When considering international market entry modes, wholly owned subsidiaries are widely recognized as the most expensive and risky option among the provided choices: strategic alliances, joint ventures, franchising, and wholly owned subsidiaries. Opting for a wholly owned subsidiary means that a parent company owns 100% of the subsidiary and therefore, has full control over the operations. Such level of control requires significant capital investment and entails high levels of risk due to factors like the dominant influence of the local business environment, and the complexity of establishing and operating a business in a foreign country.
Nevertheless, despite these risks, wholly owned subsidiaries can also offer companies complete operational control and the ability to fully transfer their company policies and culture. This method contrasts with strategic alliances and joint ventures, where there is a partnership with one or more local companies, and with franchising, where the franchisee is responsible for most of the business operations with less capital investment required from the franchisor.