By allowing a company to purchase another existing firm in the host country, a(n) ______ permits a largely domestic business to gain an international presence very quickly.
A) acquisition
B) foreign licensing agreement
C) joint venture
D) countertrade

Question

Quizplus · Accepted Answer

An acquisition allows a company to purchase another existing firm in the host country, which results in a quick expansion of the business in the international market. Acquisitions can be either friendly or hostile, and they involve either purchasing the entire company or a significant portion of its assets. This allows the acquiring company to quickly gain access to the target company's customer base, technology, market share, and other resources, which would ordinarily take years to develop through organic growth or other means. Foreign licensing agreements involve leveraging the intellectual property of one company in exchange for licensing fees paid by another company. Joint ventures involve two or more companies sharing resources and risk to develop a new business venture. Countertrade involves exchanging goods or services instead of currency.

By Allowing a Company to Purchase Another Existing Firm in the Host