What Is the Primary Distinction Between a Joint Venture and a Strategic

question 74

Multiple Choice

What is the primary distinction between a joint venture and a strategic alliance in international marketing?

• A) Strategic alliances are only formed between companies from well-developed countries whereas joint ventures are between companies from economically-diverse countries.
• B) A joint venture involves only two companies whereas a strategic alliance is formed between three or more companies.
• C) A joint venture is defined in scope, while a strategic alliance is typically represented by an agreement to work together.
• D) A joint venture is formed between companies with dissimilar product offerings while a strategic alliance is formed between companies with similar product offerings.
• E) A joint venture is simply a financial investment in a foreign firm while a strategic alliance involves more than just financial support.

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Definitions:

Marginal Cost

The escalation in total expenses incurred from creating an additional unit of a product or service.

Excess Capacity

The situation where a firm has resources that are not being fully utilized, often leading to inefficiency and increased costs.

Monopolistic Competitor

A market structure where many firms sell products that are similar but not identical, allowing them some power to set prices due to product differentiation.

Advertising

The activity or profession of producing advertisements for commercial products or services.