Licensing is a contractual agreement whereby one company (the licensor) makes a legally protected asset available to another company (the licensee) in exchange for royalties, license fees, or some other form of compensation. 1 Explain contractual entry strategies. 15. 82. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, intellectual property, intellectual property rights and more. Verified Answer for the question: [Solved] In a licensing agreement, ________ is responsible for local sales. caitlyn_stryker. Licensing, Franchising, and Other Contractual Strategies. D) strategic decision making. 15. and industry experts about instructions to franchise your business. ability to preempt rivals and capture demand by establishing a strong brand name. LICENSING AND FRANCHISING . It reduces risks for both parties. The equity modes category includes joint ventures and wholly. Franchise: A franchise is a type of license that a party (franchisee) acquires to allow them to have access to a business's (the franchiser) proprietary knowledge, processes, and trademarks in. Flashcards. When considering a venture in international markets, there are some significant tactical and strategic decisions to be effected. Question 2. , Licensing Agreement, Copyright Licensing and more. Learn. The principal advantages of international franchising are: (i) Franchising is a beneficial way to. The legal claim through which the proprietary assets of firms and individuals are protected from unauthorized use by other parties. Flashcards; Learn; Test;Exporting. Franchising. The agreement so creates a franchise relationship is the franchise agreement and aforementioned parties to a franchise agreement are the franchisor and to french. focal firm does everything for business and hands it over to customer after training. Exporting, joint ventures, direct investment, licensing, franchising, and other forms of an alliance is duly considered as market entry types. Licensing, Franchising, and Other Contractual Strategies. C. 15. In this chapter, we address various types of cross-border contractual relationships, including licensing and franchising. Country Comparatives Guides. Licensing, Franchising and other Contractual Strategies. A) bribe government officials to reduce nontariff trade barriers B) have a subjective view of moral and ethical standards C) conduct advance research on the host country's laws on intellectual property D) appoint managers from the. Study with Quizlet and memorize flashcards containing terms like contractual entry strategies in international business, intellectual property, intellectual property rights and more. Uploaded By ebrarpatriot. cross border interaction between focal firm and foreign firm governed by a contract. Low development cost and low risk in overseas expansion are advantages of this entry mode. Accounting for 12% to 13% of British trade, these methods of earning money abroad have become more popular in recent years. A modern approach to international business. 1. How Aristotle can help: the philosophy of business If your company is ever going to implement a successful licensing strategy, the corporate licensing team had better take to heart the wisdom of Aristotle. 1 Advantages and Disadvantages of Di erent Modes of Internationalization. Chapter 15. 16 Licensing, Franchising, and Other Contractual Strategies. Franchising makes up 10% of the U. Terms: a. Study with Quizlet and memorize flashcards containing terms like Inbound licenses, Outbound licensing, Contractual entry strategies in international business and more. " Early market entry is generally considered a competitive. Cross-border exchanges in which the relationships between the focal firm and its foreign partner is governed by an explicit contract. C)It restricts a firm's ability to expand more rapidly abroad. Licensing as an Entry Strategy a. licensing, Strategic alliancesA detailed list of issues pertaining to termination and renewal terms The advantages and disadvantages of franchising are similar to those of licensing. at completion of the contract, the foreign client is handed the "key. Licensing. Either way, the licensor gets a kickback—as a. Fresh features from the #1 AI-enhanced learning platform. The licensee/franchisee gets immediate brand recognition and may quickly overtake the competition by offering a product or service for which there is existing unmet demand. strategic alliances. Contract manufacturing iv. 16: Licensing, Franchising, and Other Contractual Strategies unique aspects of. they are governed by a contract that provides the focal firm with a moderate level of control over the foreign partner 2. Learn the basics of franchising and winning franchise growth strategies. Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. Which of the following is key to licensing strategy success? Avoidance of barriers for foreign companies doing business. C) There is no scope to operate an independent. But the Mouse’s actual 2023 number. 2 Understand licensing as an entry strategy. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. Flashcards. [2] defined market entry as "a planned move into a new or adjacent market for the creation and delivery of offerings. 99/year Quiz 15: Licensing, Franchising, and Other Contractual Strategies. 2. On the other hand, franchise agreements allow the use of trademarks, additional intellectual. Study with Quizlet and memorize flashcards containing terms like 5 Methods for entering the global market place from least risky/return to most risky/return, Exporting, Licensing and Franchising and more. ( Multiple Choice) Question 2. View Homework Help - Week 4 - Subway Case. Ch. Learn. In addition to the standard license process, a company will assist in establishing the business with the design, equipment, organization, and marketing. On the other hand,. Study with Quizlet and memorize flashcards containing terms like In the context of international trade restrictions, offering less-favorable exchange rates to certain importers is a(n) _____. Licensing: Arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified period of time in exchange for royalties or other compensation. 1Explain contractual entry strategies. Similar to a licensing agreement, under a franchising agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a foreign company for a specified period of time and receives a royalty in return. 3 Describe the advantages and disadvantages of licensing. import/export, joint ventures d. d. A) markets competing products for significantly lower prices B) uses the licensing asset to create products of poor quality C) refuses to pay the agreed upon royalties to the licensor D) does not guarantee future expansion in the. Disadvantages of licensing. Internal: Strategic. Chapter 16 Licensing, Franchising, and Other Contractual Strategies Learning Objectives: 1. In licensing/franchising, the organization sells the rights to intellectual property to an entity within a foreign market for a royalty fee. Default and termination 3. reduce local perceptions of the focal firm as a foreign enterprise Study with Quizlet and memorize flashcards containing terms like 1. True/False . 15. Trademark LicensingCompanies which want to establish a retail presence in an overseas market with minimal risk, the licensing and franchising strategy allows another person or business assume the risk on behalf of the company. The entry strategy in global business with the lowest risk is _____, while _____ is considered to have higher risk than the choices available. embargo, In the context of various strategies for reaching global markets, which of the following strategies. Brand licensing is the act of giving permission to another company to use your business’s intellectual property (IP). Its goal. ENTERING AND OPERATING IN INTERNATIONAL MARKETS; 13. University High School High School Regions. 4. real business leading guides that top everything from franchises basics to advanced vote growth strategies. Chapter 16 – Licensing, Franchising, and Other Contractual Strategies I. management contracts. Chapter 16 - Licensing, Franchising and other Contractual Strategies. Verified Answer for the question: [Solved] Azoo Government Projects (Scenario) The nation of Azoo needs the assistance of a contractor to construct a new bridge and a subway system. Licensing and franchising share a few similar advantages. agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a. A number of foreign market entry modes exist, including: exporting, licensing, franchising, joint venture and wholly owned subsidiary. Partnering, licensing, franchising, joint venture creation, business acquisition, and Greenfield ventures represent the spectrum of market entry opportunities. Contractual entry strategies in international business. 15. Global Market Opportunity Assessment • Estimating Demand in Emerging Markets • Global Macro Trends that Affect International Business Licensing, Franchising, and Other Contractual Strategies: Contractual Entry Strategies Licensing as an entry strategy advantages and disadvantages of licensing Franchising as an entry strategy Other. The main difference between the two is the duration of the commitment involved. License 101 Where lives Entering?. Cooperative strategies refer to any type of agreement between two or more firms, contractual or otherwise, involving mutual forbearance towards one or more (typically not identical) goals by providing capital, knowledge, technology, managerial talent, and/or other valuable assets under the purview of said firms (Anand & Khanna, 2000; Gulati, 1998). The costs of licensing and franchising vary widely depending on many factors. Learn faster. An organisation will need to determine their desired level of commitment, flexibility, control, presence and risk when going global, in order to choose the entry mode which best suits their situation. Licensing, Franchising, and Other Contractual Strategies Learning Objectives • Explain contractual entry strategies. The five most common methods include exporting, licensing and franchising, partnering and strategic alliance, acquisition, and Greenfield venture. Franchisee: A franchisee is a small business owner that purchases the right to use an existing business's trademarks, associated brands, and other proprietary knowledge. Market entry modes for international businesses. Licensees also enjoy lowered risk because they're usually entering the marketplace with a known quantity and a built-in customer base. Licensing Licensing is a contractual transaction where the firm the licensor offers some proprietary assets to foreign company the licensee in exchange for royalty fees (Kotabe and Helsen, 2010: 301). Find Flashcards. Franchising is common in manufacturing industries while licensing is primarily used in service industries. In a build operate transfer agreement how does the business that built the facility ensure that they profit from the agreement?, Test Your Comprehension, 15-9. 1. Licensing: An arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified period of time in exchange for royalties or. Multiple Choice . Contractual entry strategies in international business Click the card to flip 👆 cross-border exchanges in which relationship between the focal firm and its foreign partner is governed by an explicit contract Licensing, Franchising and other Contractual Strategies International Business Strategy, Management. 15. 15. While deciding between franchising vs. 2. provides technical specifications to a subcontractor or local manufacturer. 0 (1. International Business Strategy, Management & the New Realities. Of course, when Switzerland let the value of its franc 30% against the euro, the cost of exports increased, and Swiss goods when bought with the franc, could be purchased at a large. arrangement in which an independent company is licensed to establish, develop, and manage the entire franchising network in its market and has the right to subfranchise to other franchisees, assuming the role of local franchisor. In deciding which method to adopt, it is important that a firm evaluate each entry mode’s. One could say that franchising is a special type of licensing arrangement inContractual Entry Modes A company can use a variety of contracts such as : licensing, franchising, management contracts, and turnkey projects to market highly specialized assets and skills in markets beyond its nation’s border. CHAPTER 15 LICENSING FRANCHISING AND. Intellectual Property rights – legal claims that protect proprietary assets of firms and indivduals from unauthorized use by other parties III. Internal: Operational. Licensees can re-sell the IP at a higher price or manufacture merchandise with the IP on it. Turnkey Project b. e. AI Homework Help. Mode Characteristics Advantages Disadvantages. 4. Flashcards. Greenfield Strategy v. , licensing and franchising) have lower up-front costs than investment modes do. Major global. ( Multiple Choice) Question 2. 2. Another popular way to expand overseas is to sell franchises. , Contractual alliances include all of the following except: a. 2. A licensing is an agreement whereby a licensor grants the rights to intangible property (patents, inventions, formulas, processes, designs, copyrights, and trademarks) to another entity (licensee) for a specified period and in return, the licensor receives a royalty/fee from the licensee. Studying is made a lot easier and more fun with our online flashcards. 3. - As entry strategy, licensing requires neither substantial capital investment nor extensive involvement of licensor in foreign markets. Similar to a licensing agreement, under a franchising Granting rights on an intangible property, like technology or a brand name, to a foreign company for a specified period of time and receiving a royalty in return. The difference between licensing and franchising is that franchise agreements involve an extensive business relationship between franchisor and franchisee whereas license agreements are limited and relate to a. 5Explain the advantages and disadvantages of franchising. the positive or negative perception of firms and products from a certain country. Learn from your partner (and apply that knowledge within your organization) Study Chapter 5: Entry into Foreign Markets flashcards. C) cross licensing. Subscribe to newsletters Subscribe: $29. Both licensing and franchising are really fantastic. This part concerns the sale of knowledge rather than the sale of goods—licensing, franchising, management contracts and other similar arrangements. The license agreement permits the use of trademarks, nothing more. Which mode is to be used in which situation 5. University University of. Turnkey projects 3. Ch 16: Licensing, Franchising, and other Contractual Strategies. with direct or area franchise forms of licensing (P2a). In licensing, the licensor has limited control over the operations of the licensee, whereas franchising involves extensive control and support provided by the franchisor. Patent. commercial centers provide the following services: business facilities; translation and clerical services; a commercial library with legal information; and assistance with contracts and export/import arrangements. The impact of strategy considerations can most easily be illustrated in a Cournot duopoly setting as displayed in Fig. 2. A. Switzerland is a country that has revaluated its currency—this does not happen often. ,. Learn faster with spaced repetition. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in International Business, Intellectual Property, Intellectual Property Rights and more. Licensing refers to a business arrangement, where a company (licensor) sells its intellectual property to another company (licensee), or the right to produce its products, for a specified fee (royalty). Licensing is a contractual arrangement where a company grants permission to another party to use its intellectual property or brand. Licensees can re-sell the IP at a higher price or manufacture merchandise with the IP on it. Two common types of contractual entry strategies are licensing and franchising. An industrial design is intended to _____. Study Licensing, franchising and other contractual strategies (Key Terms) flashcards from Lewis Mellor's class online, or in Brainscape's iPhone or Android app. Franchising. 3. Licensing, Franchising, and Other. Flashcards. Technically, the contract binding. The Franchiser requires the franchisee to make a minimum payment of $500 or more, and. Terms in this set (19) Contractual entry strategies. Test. • Describe. 2. When it comes to retail entrepreneurship, there are several ways to open a. Test. patent. Test. Essentially, it entails selling the rights to conduct a proprietary business to another individual, usually in a specified geographic region. import/export, licensing c. Joint R&D iv. In turnkey contracting, one or several firms plan, finance, organize, and. Direct exporters often sell directly to a consumer (B2C), a business (B2B), or a distributor in a foreign country. School Anadolu University; Course Title BUS 1332; Type. A strategic alliance is a collaborative agreement between two or more companies to pursue mutually beneficial objectives. Strategic alliances can take many different forms, such as joint ventures, licensing agreements, and marketing alliances. What is Licensing and Franchising? Licensing is a contractual agreement in which one company provides another company in foreign country access to its patents, trade secrets, or technology in exchange for a fee known as a royalty. When a firm allows others to use an entire business system in exchange for compensation, the arrangement is known as ________. Learn. Contract manufacturing is also called outsourcing. Exporting involves marketing the products you produce in the countries in which you intend to sell them. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. Ch. Licensing, Franchising and other contractual strategies. Franchising is another variation of licensing strategy. Equity-based arrangements. Flashcards. 1. Turnkey contracting. 3. Similar to a licensing agreement, under a franchising Granting rights on an intangible property, like technology or a brand name, to a foreign company for a specified period of time and receiving a royalty in return. View Any. It's also easier for the company to extricate itself from the situation if the results aren't favorable. Test. They provide dynamic flexible choice View LICENSING from BUSINESS A M0804455 at Ain Shams University. From a licensee standpoint, there are fewer risks in product development, market testing, manufacturing, and distribution. Organising for the Strategy. My. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Intellectual property rights and more. Ch. Study with Quizlet and memorize flashcards containing terms like Strategic alliances involve: a. Discover. The International Franchise Association defines franchising as a "continuing relationship in which the franchisor provides a licensed privilege to do business, plus assistance in organizing training, merchandising and management in return for a consideration from the franchisee ". equity mode of entry into foreign markets limited to a contractual agreement. Abstract. Match. A) Nickelodeon B) The Walt Disney Company C) Mattel D) Major League Baseball Services Discover Topics Ask a questionVerified Answer for the question: [Solved] To minimize the complexity of franchising, focal firms must ________. Why would a company choose to use a contractual mode of entry rather than an investment mode? Contractual forms of entry (i. pdf from BUST 08009 at University of Edinburgh. Process. Learn faster with spaced repetition. Licensees "rent" the brand from the owner, but are then expected to use their own expertise, capabilities and resources to innovate, produce, market and sell the. a. 15. Arrangement in which an independent company is licensed to establish, develop, and manage the entire franchising network in its market and has the right to sub franchise to other franchisees, assuming the role of local franchisor. True or false: Transportation costs would have an effect on which entry mode a company uses. Firms can pursue them independently or in conjunction with other entry strategies. Learn. 15 ~ Licensing, Franchising, and Other Contractual Strategies. Licensing 4. The Franchiser requires the franchisee to make a minimum payment of $500 or more, and. Terms in this set (7)Study with Quizlet and memorize flashcards containing terms like when it comes to getting involved in international business what are the three strategies that require the least amount of commitment and effort?, export assistance centers provide hands-on expiring assistance and trade-finance support for ____ and _____ -sized businesses. Representatives of the Azoo government are reviewing the project bids. Licensing, Franchising, and Other Contractual Strategies. An arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified period of time in exchange for royalties or other compensation. turnkey contracting. Reasons for Licensing:Get Quality Help. Licensing: Licensing offers several benefits for both the licensor and the licensee. Total views 38. All of the above. Voluntary agreements between firms. Flashcards. A licensing agreement allows a foreign company to sell a company’s. the advantages of franchising as an entry mode to global expansion are similar to the disadvantages of licensing false the least preferred strategy when a company's competitive advantage is based on technology is the wholly owned subsidiaryChapter 6: Strategic Alliances. industry are franchising and management-service contracts (MSC). A _____ is a fee paid periodically to compensate a licensor for the temporary use of its intellectual property, often based on a percentage of gross sales generated from the use of the licensed asset. By entering your email, you agree to receive marketing emails from Shopify. 3. What are unique aspect of contractual relationship (5) 1. Franchising, on the other hand, is a business expansion model where a franchisor grants the rights. Indirect strategies are indirect/direct exporting, licensing, franchising and contractual agreements (see Table 2). focal firm does everything for business and hands it over to customer after training. Two common types of contractual entry strategies are licensing and franchising. In this chapter, you will learn about: Contractual entry strategies Licensing as an entry strategy Advantages and disadvantages of licensing Franchising as an entry strategy. give later entrants a cost advantage over early entrants. Learn the distinguishing between licensing and franchising and why licensing is not certain alternative on franchising. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in International Business, Intellectual Property, Intellectual Property Rights and more. Low control, low local knowledge, potential negative environmental impact of transportation. Focal firm has moderate level of control over the foreign partner. To sum up, there are various methods that a firm can utilize in its foreign market entry market strategy. Licensing and franchising are two international market entry strategies that businesses can use to expand their operations. Licensing is a contractual agreement whereby, in exchange for a royalty or fee, a company gives the right to another company to use a trademark, know-how, or other proprietary technology. Several companies get patent their technology and other products that they don’t want anyone else to use without their consent. Advantages:The commercial center does this by familiarizing U. franchising, wholly owned foreign subsidiaries b. Brand licensing is the act of giving permission to another company to use your business’s intellectual property (IP). Licensing specifies the territory as well as period. Created by. • Understand infringement of intellectual property Foundation Concepts • Contractual entry strategies in international business: Cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. Contractual Entry Strategies. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. Licensing is expensive and it requires process like agreement & It is similar as Franchise Operation. Provide dynamic, flexible choice. An organisation will need to determine their desired level of commitment, flexibility, control, presence and risk when going global, in order to choose the entry mode which best suits their situation. Franchising. Licensing & Franchising The major drawback of licensing is the problem of controlling the licensee due to the absence of direct commitment from the international firm granting the licence. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, intellectual property, intellectual property rights and more. Test. Why would a company choose to use a contractual mode of entry rather than an investment mode? Contractual forms of entry (i. D) franchise contract involves less control and. They typically include the exchange of intangibles and services. There are five basic options available: (1) exporting, (2) creating a wholly owned subsidiary, (3) franchising, (4) licensing, and (5) creating a joint venture or strategic alliance (Figure 7. Two Types of Contractual Entry Strategies • Licensing: An arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified period of time in exchange for royalties or other compensation • Franchising: An arrangement in which the firm allows another the right to use an entire business system. ,. Chapter 3 described the approach and methodsUnformatted text preview: 446 Chapter l6 Licensing, Franchising, and Other Contractual Strategies l Include noncompete clauses in employee contracts for all positions to prevent employees from serving competitors for up to three years after leaving the firm. They are governed by a contract that provides the focal firm a moderate level of control over the foreign partner. These options vary in terms of how. intellectual property. Protecting Intellectual Property. trading bloc c. Chapter 16: Licensing, Franchising and other Contractual Strategies. When considering a venture in international markets, there are some significant tactical and strategic decisions to be effected. While extant research revolves around the level of resource commitment and control in foreign activities, non-traditional. 13 8. Franchising. 3. Franchising; Meaning: This is a contractual agreement in which one firm gets access to another firm’s patent, technology and other things in exchange for money. Contractual entry strategies 2. Which of the Following is Provided by the Licensor in a Licensing. Key challenges faced by the franchisee is the decreased likelihood of operating an independent business. Our clients are winning for franchising. wholly owned subsidiaries. Contractual Entry Strategies Contractual entry strategies Two common types of contractual entry strategies are licensing andLicensing. Multiple Choice . Some companies use direct exporting, in which they sell the product they manufacture in international markets without third-party. Study with Quizlet. contractor supplies managerial know how. Expert Help. The Five Common International-Expansion Entry Modes. Change Message. in exchange for royalties, license fees, or some other form of compensation Patent Trade secret Brand name Product formulations. Unique aspects of contractual relationships They are governed by a contract that provides the focal firm with moderate level of control over the foreign. c. Since franchisees will assume many of the responsibilities otherwise shouldered by. Financing is more costly in other countries. Chapter 15 Licensing, Franchising, and Other Contractual Strategies 1) _____ is a fee paid periodically to compensate a licensor for the temporary use of its intellectual property, often based on a percentage of gross sales generated from the use of the licensed asset. Licensing of IPRs is at the heart of a franchise contract. c. accepting a franchise for dealing with the traditional products. Post termination issues. When the executives in charge of a firm decide to enter a new country, they must decide how to enter the country. Licensing term can be defined as “The method of operating in other country wherein a Firm of one country agrees to permit a company in another country to use the manufacturing, Processing, Trademark & other skill provided by the Licensor”. C) They attract less attention and less of the criticism sometimes directed at firms. Direct strategies include joint ventures and wholly-owned subsidiaries/ greenfield investments (see Table 2). Licensing is governed by a licensing agreement, which involves a one-time transfer of property or rights for a fee. the firm enters a foreign market before other foreign firms - this is a proactive strategy. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in IB, Intellectual Property, Contractual Entry Strategies and more. master franchise. A Definition of the Franchise Concept In its broadest sense, a “franchise” is a contractual relationship between a “franchisor” and an independent “franchisee” whereby the former licenses the latter to distribute aFranchising: Franchising is a common strategy used by businesses seeking to expand their operations in a risk-conscious manner. [afm 333 – chapter 16 li censing, franchising, and o ther contra ctu al stra tegie s] 1 Contr actual entry s tr ateg ies in int ernational business: cr oss-border e x changes wher e the re lationship between t he foc al firm and its f oreign partner is g overn ed by an explicit co ntr act The difference between licensing and franchising is that franchise agreements involve an extensive business relationship between franchisor and franchisee whereas license agreements are limited and relate to a singular activity such as the shared use of a trademark. Intellectual property rights (IPRs) legal claim through which the proprietary assets of firms and individuals are protected from unauthorized use by other parties, monopoly advantage for specified period of time.