A Joint Venture Is an Attractive Way for a Company

question 61

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)the firm 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 the company to pursue alone or when the company lacks some important resources or competencies and needs a partner to supply them.

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