ABC Co. wants to market their products in Brazil. Armed with the design and manufacturing capability, ABC looks for a company with the distribution channels and knowledge of the Brazilian culture necessary to market their products. After conducting research, ABC decides to form a partnership with XYZ Inc. in Brazil. The company will be jointly owned and operated. In this scenario, ABC Co. forms a(n) __________ with XYZ Inc.
A) franchise
B) joint venture
C) licensing agreement
D) operating subsidiary

Question

Quizplus · Accepted Answer

ABC Co. is forming a partnership with XYZ Inc., where both companies will jointly own and operate the business. This arrangement is best described as a joint venture. A franchise involves granting the right to use a company's name or business model in exchange for a fee, while a licensing agreement involves granting permission to use intellectual property. An operating subsidiary is a company wholly owned and controlled by another company.

ABC Co Wants to Market Their Products in Brazil