A domestic firm and a foreign firm sharing the cost of developing new products or building production facilities would be called a __________.
A) franchising agreement
B) strategic alliance
C) foreign subsidiary
D) brokering agreement
E) transnational venture

Question

Quizplus · Accepted Answer

A strategic alliance is a type of partnership between two companies where they agree to share resources and costs for a specific project or objective. This can include joint product development or building production facilities, as well as other types of collaborations. Option A, franchising agreement, typically involves one company licensing its brand and business model to another company, while option C, foreign subsidiary, refers to a company setting up a separate entity in another country. Option D, brokering agreement, may involve a company acting as an intermediary between buyers and sellers, but does not necessarily involve sharing costs for development or production. Option E, transnational venture, is a broader term that encompasses different types of international partnerships and collaborations, but does not specifically refer to cost-sharing between companies.

A Domestic Firm and a Foreign Firm Sharing the Cost