Question

As a general rule, the Chinese government allows foreign companies to participate in its market only if those companies agree to establish operations with local Chinese enterprises. Which market entry mode would be the appropriate choice under these circumstances?A) acquisition
B) licensing
C) joint venture
D) exporting
E) franchising

Answer 1

Answer:

C. Joint Venture

Explanation:

A Joint Venture is a business agreement in which two or more parties agree to combine their resources in order to achieve an objective.

Companies use Joint Ventures to partner with foreign businesses in order to enter their market. This is what China is proposing in the scenario above, and it has been done in order that China might have a stake in those businesses.

Advantages of a Joint Venture include:

• Access to new markets.
• Pooling of resources.
• Low cost of production.
• Access to expertise ans technology, and so on.