Better Boots Inc. wishes to market their products in the Far East. Although Better Boots has the design and manufacturing capability, the company lacks the distribution channels and knowledge of the Far East cultures necessary to market their products. Bill Somebody, president of Better Boots, has decided to form a partnership with Far East Boots, an Asian company. Far East boots will provide the marketing know how that Better Boots lacks. The company will be jointly owned and independently operated. Better Boots is forming a(n) __________ with Far East Boots.*

Question

Quizplus · Accepted Answer

Better Boots is forming a joint venture with Far East Boots where the two companies will jointly own and independently operate the business. This will bring together the design and manufacturing capability of Better Boots with the marketing know-how of Far East Boots to successfully market their products in the Far East. Franchise, licensing agreement, and operating subsidiary are not appropriate as they do not accurately describe the nature of the partnership being formed.