Which term refers to a market entry strategy involving two or more firms creating a new entity, allowing the partners to pool their resources for common goals? A. Direct investment B. Joint venture C. Licensing agreement D. Exporting E. Franchise agreement

Answer: B. Joint venture.

Explanation:

Joint venture is a type of business in which two or more persons or organizations under certain agreements pools resources together to start a business, or project. Such business is characterized by shared returns, governance, risks, and ownership.

A good example is between BMW and Toyota in which they operate a joint venture in carrying out research on vehicle electrification, hydrogen fuel cells, and ultra lightweight materials for car production.

Characteristics of Joint venture includes:

•It creates synergy between all parties involved.

•Risk and rewards are shared between all involved parties.

•There are no separate laws that guides them.