If TOMS decided to enter the tea business and they purchased part of a foreign tea company to join with them to found TOMS Teas, this would be an example of __________.
a. direct foreign investment
b. contract manufacturing
c. a joint venture
Answer:
This would be an example of a joint venture.
Explanation:
A joint venture (JV) is a corporate agreement in which two or more organisations agree to share money to carry out a specific mission. This role can be a new project or a new enterprise.
Each of the partners shall be liable in a joint venture (JV) for benefit, loss and related costs. The corporation is therefore its own organisation, independent from other corporate interests of the members.
These are alliances, which can carry on some formal system in a conversational context.
The common usage of JVs is to join a global industry partner with such a local company.
