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:

Future

The time or a period of time following the moment of speaking or writing; time regarded as still to come.

Preventing Crime

Measures or strategies designed to deter illegal activities and protect individuals and communities from criminal acts.

Just Deserts

The concept of receiving a punishment or reward that is rightfully deserved.

Incapacitation

The state of being disabled or deprived of legal power or physical capabilities.