Answer:
Joint venture
Explanation:
Typically , joint venture is formed in order to:
- Pursue a new emerging market
To pursue an emergency market, two companies who operate in a similar industry can join their resources to face off larger competitors. Even though they might lose a little bit of control over the business, the profit that obtained from beating their competitors might be enough to cover the inconvenience
- increase the efficiency of their operation
Sometimes, companies also create a join venture because both parties involved have infrastructure that complement each others. Rather than purchasing new assets, creating a joint venture might be a cheaper option.
- Reduce the Risk of the operation
Creating a joint venture will also cut of the percentage of the profit that each parties initially obtain. But, the risk from potential loss will also be divided between each parties involved in the joint venture.
