Diet Soda and High Caffeine are two firms that compete in the soft drink market. These two competitors have decided to invest $10 million to form a new company, Fruit Tea, which will manufacture flavored teas. This new firm is defined as a:
A) consolidation.
B) strategic alliance.
C) joint venture.
D) merged alliance.
E) takeover project.

Question

Quizplus · Accepted Answer

Fruit Tea is a new company formed by two competing firms, Diet Soda and High Caffeine, investing $10 million. This new venture is defined as a joint venture, which is a strategic cooperation between two or more firms to pursue a specific business opportunity. Both parties retain their separate identities and have joint ownership and control over the venture.

Diet Soda and High Caffeine Are Two Firms That Compete