Final answer:
A joint venture is a strategy where a local and foreign firm form a partnership to share ownership, control, and the profits of a new company, which allows for shared risks and resources in international markets.
Step-by-step explanation:
A joint venture is a global market-entry strategy that forms a partnership between a local and a foreign firm, sharing ownership, control, and profits of the new company. This strategy is quite popular in a globalized economy as it allows for the sharing of risks and responsibilities while granting access to new markets. Companies may seek to enter foreign markets to take advantage of local expertise, resources, and existing market presence which a local partner can provide, as well as for diversification purposes.
Joint ventures can be an attractive option for businesses looking to expand internationally without the commitment of a full acquisition or the potential complexities of navigating a foreign market alone. By pooling resources and knowledge, firms can mitigate the risks associated with international business ventures and increase their chances of success in new markets.