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

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.
it needs access to economies of scope and good financial fits in order to be cost-competitive.
it is uneconomical for the firm to achieve economies of scope on its own initiative.
the firm has no prior experience with diversification.
it has not built up a hoard of cash with which to finance a diversification effort.

Question

17-03-2020
Business

contestada

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

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.
it needs access to economies of scope and good financial fits in order to be cost-competitive.
it is uneconomical for the firm to achieve economies of scope on its own initiative.
the firm has no prior experience with diversification.
it has not built up a hoard of cash with which to finance a diversification effort.

Respuesta :

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Answer:

The correct answer is letter "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.

Explanation:

Two or more companies in a traditional joint venture agree to contribute capital and resources to a specific project. Developers, suppliers, and service providers typically agree to form joint ventures. If the company is successful, those parties will divide the profit based on the value of their contribution to the joint venture.

Thus, companies tend to form joint ventures to complement is core competencies and benefit from the competitive advantages, know-how, capital, and experience of other firms to come up with a specialized output.