Scenario: Sports Stuff Inc.
Herb Graham is vice president of Sports Stuff Inc., a business that develops, manufactures, and markets sports products. The company is looking to expand its operations into the European market. Herb believes that if the company expands its product line to include products reflecting sports that are popular in Europe, the company will achieve success there.
-The board of directors of Sports Stuff is concerned with the firm's lack of experience in foreign markets.To minimize this problem,Herb recommends that the firm create a ________ with a local partner.
A) joint venture
B) turnkey project
C) wholly owned subsidiary
D) franchise

Question

Quizplus · Accepted Answer

A joint venture is the best choice in this scenario because it would allow Sports Stuff to partner with a local company that has experience in the European market. This local partner will have knowledge of the market and consumer preferences that Sports Stuff may not have, thus minimizing the risk of failure. Additionally, a joint venture would allow Sports Stuff to share the costs and risks of entering the European market with its local partner.