A Joint Venture Is an Attractive Way for a Company

question 21

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 or when a company lacks some important resources or competencies and needs a partner to supply them.

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Definitions:

Interactive Media

Media that allows active participation by the user, enabling two-way communication and engagement through digital platforms.

Industrial Distributors

Companies that specialize in distributing products and supplies to businesses, institutions, and industries rather than to individual consumers.

Consumer Products

Goods and services that are bought by individuals for personal use.

Marketing Channel

The pathways or routes through which goods and services flow from the producer to the consumer.