global mergers and joint ventures

Question 1

joint venture

Answer 1

legal agreement between two or more firms to work together on a joint project
stay seperate
share equity and profits of venture

Question 2

what is a global merger

Answer 2

two or more busienss from different counteries come togeyrh to become a single business

Question 3

why would a business become a joint venture or merger(spread of risk)

Answer 3

spread risk -if a business decides to trade internationally, may not have much knowledge of country and make costly mistakes
wheras, foregin firm in joint venture or merger should bring good knowledge of the new country reducing these risks

also, smaller impact if demand go down in one country as operating in many so wont make as much of a difefrence

any risks are shared between partners, reducing the impact of the firm

Question 4

other reason a business would become a joint venture or global merger

Answer 4

access to different markets
one being in trading bloc, another not but that business can join trading bloc without having to pay tarrifs
avoid government legislations

business with more EDC may investing in merging economy where chance for growth

Question 5

another reason a business would become joint venture or global merger (securing resources with supplies)

Answer 5

can give access to or help secure supplies of raw materials
and other resources

may have good relationships with particualr suppliers that business wants