Question

"Business Expansion Plan (Scenario)

As a business expansion director, Shana's goal is to scout potential locations for her company's planned expansion to other countries. There are many options, some of which include maintaining the business's head office in the United States. Other options send company representatives to foreign operations when necessary, or establishing separate operation facilities abroad and hiring locals as managers.

If Shana is considering forming a partnership with a Dutch corporation that will create an entirely new company called Half Moon, what kind of enterprise will Half Moon be?

A. Joint venture

B. Franchise

C. Merger

D. Subsidiary

Answer 1

Half Moon will be a Joint Venture, a partnership where two or more businesses create a new entity while remaining distinct from one another.

Step-by-step explanation:

If Shana is considering forming a partnership with a Dutch corporation that will create an entirely new company called Half Moon, the kind of enterprise Half Moon will be a Joint Venture. A joint venture is when two or more parties, usually businesses, form a partnership to create a new enterprise, sharing resources, risks, and profits, but remaining distinct entities. This is different from a merger, where two firms combine to form a single large corporation often to become more efficient or acquire a new product line. It also differs from a subsidiary, where a parent company owns a controlling stake in a separate company. Lastly, a franchise involves the granting of rights by one business to another to sell goods or services under the brand of the first business.