Aldhurst Corp., a software manufacturing firm in Lochmount, a European country, bought Fairden Corp., a software manufacturing firm in Vertholt, an Asian country. This scenario is an example of _____.
A) a strategic alliance
B) direct foreign investment
C) licensing
D) a joint venture

Question

Quizplus · Accepted Answer

This scenario is an example of direct foreign investment, as Aldhurst Corp. has acquired a controlling interest in Fairden Corp. by purchasing the company. A strategic alliance would involve a partnership or collaboration between the two companies, but not necessarily a takeover. Licensing would involve one company granting permission to another to use its intellectual property, but again, not a takeover. A joint venture would involve two companies forming a new entity together, rather than one company acquiring another.