Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Please describe Strategic Alliance & Joint Venture underlying reason behind that strategy and the pros and cons associated with it.
Expert Solution
Step 1 Introduction
Joint venture occurs when two companies come together to share returns, risks and shared governance. Companies opt for JV to access new markets, gain economies of scale etc. Other reasons include after coming to JV both companies share risks related to major investments.
A strategic alliance is an agreement between two parties or companies that come together to pursue certain objectives in this both the companies contribute their respective shares and take risks associated with the project.
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