A Joint Venture Is an Attractive Way for a Company

question 93

Multiple Choice

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

• A) a firm is missing some essential skills or capabilities or resources and needs a partner to supply the missing expertise and competencies or fill the resource gaps.
• B) it needs access to economies of scope and good financial fits in order to be cost-competitive.
• C) it is uneconomical for the firm to achieve economies of scope on its own initiative.
• D) the firm has no prior experience with diversification.
• E) it has not built up a hoard of cash with which to finance a diversification effort.

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Definitions:

Fair Coin

A coin that has an equal likelihood of landing on heads or tails when flipped, symbolizing a 50/50 chance in probability terms.

Consecutive Tails

A term referring to the occurrence of the tails side of a coin showing up multiple times in a row during coin tosses.

Defect

A flaw or fault in something that reduces its quality, effectiveness, or performance.

Soviet Navy

The maritime arm of the Soviet military forces, responsible for naval warfare and protecting the USSR's interests at sea during its existence.