Question

Which of the following is an advantage of joint ventures?

A. They create strong ties, trust, and commitment between the partners.
B. They are based on contractual agreements rather than partial ownership.
C. They require the lowest amount of investment relative to the other alliance types.
D. They can be easily initiated and terminated.

Answer 1

The advantage of joint ventures is that they create strong ties, trust, and commitment between the partners, offering shared responsibility and access to new markets while taking advantage of complementary skills.

Step-by-step explanation:

An advantage of joint ventures is that they create strong ties, trust, and commitment between the partners. This collaborative strategy allows businesses to share responsibility and risk while leveraging complementary skills to enhance management and decision-making.

Furthermore, in international business scenes, joint ventures can help companies to align strategically to meet business goals, often leading to integrated networks of trade and better competition in the global marketplace. Despite some potential downsides, like partners being responsible for each other's actions and the limited life of a partnership, the benefits of a joint venture can be substantial, including shared resources and access to new markets.