A Joint Venture Is an Attractive Way for a Company

question 153

Multiple Choice

A joint venture is an attractive way for a company to enter a new industry when:

• A) the pool of attractive acquisition candidates in the target industry is relatively small.
• B) it needs better access to economies of scope in order to be cost-competitive.
• C) the industry is growing slowly and adding too much capacity too soon could create oversupply conditions.
• D) the firm has no prior experience with diversification and the industry is on the verge of explosive growth.
• E) the opportunity is too risky or complex for a company to pursue alone,a company lacks some important resources or competencies and needs a partner to supply them,and/or a company needs a local partner in order to enter a desirable business in a foreign country.

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Definitions:

Fisheries Management

The regulation and supervision of fishing activities to ensure sustainable use of aquatic resources.

Marine Animals

Aquatic organisms that live in the ocean and other saltwater environments.

Fishery

A stock of fish or other marine animal that is composed of a distinct group, for example New England cod, Pacific tuna, or Alaskan crab.

Fisheries Management

A process that involves regulating the amount and method of fishing to ensure sustainable fish populations and marine ecosystems.