How Does a Joint Venture Differ from a Strategic Alliance

question 34

Multiple Choice

How does a joint venture differ from a strategic alliance?

• A) A joint venture is where two organisations act as venture capitalists to fund the development of a third organisation, whereas an alliance involves contributing expertise rather than money.
• B) The two terms are interchangeable and both describe collaboration between two or more organisations.
• C) A joint venture is when two or more organisations set up a new enterprise, whereas a strategic alliance is a temporary collaboration to achieve a shared goal.
• D) A joint venture is where two companies own equal shares in a third, whereas a strategic alliance is where one of them is a junior partner, owning less than an equal share.

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Definitions:

ABC

Activity-Based Costing, a method of allocating costs to products or services based on the resources they consume.

Unused Capacity

Refers to the resources or capabilities within a business that are not currently being used to their full potential, which can lead to inefficiencies or lost income.

Activity-based System

An activity-based system is a method of assigning costs to products or services based on the activities that go into producing them, aiming to provide more accurate cost information.

Resource Drivers

Factors that determine the consumption of resources within a business or organization.