If Gateway and Compaq established a jointly owned entity for the purpose of building computers to export to Asia, that would be an example of a ___________________ form of foreign market entry.
A)wholly owned subsidiary
B)joint venture
C)turnkey project
D)franchise
E)merger

Question

Quizplus · Accepted Answer

This scenario describes a joint venture, in which two or more companies establish a jointly owned entity to pursue a specific business opportunity. In this case, Gateway and Compaq are collaborating to build computers for export to Asia. A wholly owned subsidiary involves a company setting up a new subsidiary in a foreign market that it owns outright, while a turnkey project involves building and transferring a facility or operation to a buyer who then operates it. A franchise involves licensing the use of a brand or business format to a third party in a foreign market, while a merger involves two or more companies combining to form a single entity.

If Gateway and Compaq Established a Jointly Owned Entity for the Purpose