Licensing. Chapter 8: Global Products. OTHER STRATEGIC ALLIANCES i. Post termination issues. Terms in this set (21) Contractual entry strategies in international business. Equity-based arrangements. 15. *Granting a right to use property to others. Provide dynamic, flexible choice. Since franchisees will assume many of the responsibilities otherwise shouldered by. Outline the challenges facing professional service firms when they internationalize. a. To sum up, there are various methods that a firm can utilize in its foreign market entry market strategy. Process. 3Describe the advantages and disadvantages of licensing. trading bloc c. Difference between licensing and. • Understand licensing as an entry strategy. Contractual Entry Strategies. patent. The impact of strategy considerations can most easily be illustrated in a Cournot duopoly setting as displayed in Fig. As it becomes evident from the definition, the transfer of the right of use is arranged in a license contract. 1 Explain contractual entry strategies. Licensing. Match. Disadvantages of licensing. 2. Footnote 3 We assume that the entering firm E and the domestic incumbent I have identical and constant marginal cost c if firm E uses the FDI strategy. When a firm allows others toIn Malaysia, franchising and licensing are governed under different laws. In 1974 the company started franchising in the USA and later it was uses in order to expand globally. includes exchange of intangibles and services 3. Learn. 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) _____. 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. Learn. Royalties. A franchisor may not enforce a terminable-at-will contract clause in a jurisdiction that requires good cause to terminate a franchise agreement—even if the franchisee’s attorney actively negotiated the contract and the franchisee is given the sameLearn Licensing, Franchising and other contractual strategies with free interactive flashcards. -most often begun with export. An MNC may move into that mode voluntarily (to test the waters, so to speak) or for purely defensive reasons (to prevent a competitor from entering the market or to preserve sales that otherwise would be lost because of a. A patent exclusively refers to a distinctive design, symbol, logo, word, or series of words placed on a product label. Devaluation decreases the value of currency in relation to other currencies. agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a. 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. 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. It's also easier for the company to extricate itself from the situation if the results aren't favorable. licensing, don’t forget that they are separate concepts and each of them offers promising prospects. 4 illustrates the nature of the franchising agreement A typical. In addition to the standard license process, a company will assist in establishing the business with the design, equipment, organization, and marketing. Posted by Rully Mangunsong at 10:16 AM. University University of. 1-1 BUS 434 Market Entry Licensing, Franchising, and Other Contractual Strategies 1-2 Contractual Relationships • 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. It reduces risks for both parties. Methods for General Eintrittspreis into the Total Marketplace. chapter 16 licensing, franchising, and other contractual contractual entry strategies in international business: exchanges where the relationship between the. In a very real sense, a licensor and licensee are entering into “a partnership for living well”, ie, the licence willVerified Answer for the question: [Solved] Which of the following is an example of licensing? A) Saks Inc. Beyond importing, international expansion is achieved through exporting, licensing arrangements, partnering and strategic alliances An international entry mode involving a contractual agreement between two. Stage Three: Specify a specific format that is either equity based or contractual (nonequity based). Study with Quizlet and memorize flashcards containing terms like Build-operate-transfer (BOT), contractual entry strategies in international business, Intellectual Property and more. cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit. Licensing is an arrangement by which the owner of intellectual property grants another firm the right to use that property for a specific time period in exchange for royalties or other compensation. make it easy for later entrants to win business. View Test Prep - licensing and franchising from ECONOMICS 12 at Xavier Institute Of Management & Research. The strategy is to deter other firms’ entry into the market. Two common types of contractual entry strategies are licensing and franchising. For courses in international business. 8 billion. Franchising is an example of a contractual vertical marketing system. 1 Explain contractual entry strategies. embargo, In the context of various strategies for reaching global markets, which of the following strategies. A license is much more limited than a franchise. Management Contract 4. Protecting Intellectual Property. A patent exclusively refers to a distinctive design, symbol, logo, word, or series of words placed on a product label. One of the key differences between a franchise and a license is the limitation set out in licensing agreements. Table 7. Aspect Franchising Licensing; Definition: Franchising is a business model where a franchisor grants a franchisee the right to operate a business using the franchisor’s brand, systems, and support in exchange for fees and royalties. Fast entry, low risk. The main reasons companies form strategic alliances are to gain access. Exporting and foreign direct investing are two common types of contractual entry strategies. Find Flashcards. Which of the following is key to licensing strategy success? Avoidance of barriers for foreign companies doing business. They typically include the exchange of intangibles. 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. 4 Understand franchising as an entry strategy. Fresh features from the #1 AI-enhanced learning platform. Learn. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. Licensing is an arrangement in which a company (licensor) sells the right to use intellectual property or produce a company's product to the licensee, for royalty. Learn faster with spaced repetition. Match. caitlyn_stryker. When a business enters a foreign market after other foreign firms, the situation is defined as ______ entry. turnkey contracting. Franchising. 5Explain the advantages and disadvantages of franchising. They provide dynamic, flexible choice. WEEK 12 - LICENSING, FRANCHISING AND OTHER CONTRACTUAL STRATEGIES. give later entrants a cost advantage over early entrants. An industrial design is intended to _____. Licensing agreement specifies nature of relationship between licensor and licensee. My Library. It is where a person (franchisor) who has developed a certain way of doing a business gives another. 7 Using Demographics to Guide Global Marketing Strategy 6. 1. 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). 15. Uploaded By ebrarpatriot. Another popular way to expand overseas is to sell franchises. Licensing and franchising. A strategic alliance is a collaborative agreement between two or more companies to pursue mutually beneficial objectives. cross-border exchanges in which relationship between the focal firm and its. 2. 2. Can be pursued independently or in conjunction with other entry strategies. This part concerns the sale of knowledge rather than the sale of goods—licensing, franchising, management contracts and other similar arrangements. Match. 0 (1. Franchising and licensing both offer business opportunities with some of the work already done for you, but that doesn't mean they're exactly the same. Chapter 15 Licensing, Franchising and other Contractual Strategies Internatonal Business:Contractual entry strategies in international business. provides technical specifications to a subcontractor or local manufacturer. Country Comparatives Guides. International Business: The New Realities, 5e, Global Edition (Cavusgil) Chapter 15 Licensing, Franchising, and Other Contractual Strategies. •Franchising is an advanced form of licensing in which the focal firm, the franchisor,. Try Shopify free for 3 days, no credit card required. 15. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Licensing and more. Two Types of Contractual Relationships. 3. 2Understand licensing as an entry strategy. Chapter 14 Licensing, Franchising, and other Contractual Strategies Opening: Harry Potter; The Magic of Licensing386 • Warner Brothers has exclusive licensing rights to the Potter series • Warner allows companies to use Potter realted images on manufactured products in exchange for royalty • Licensing process is self generating o Each new. Introduction to International Business Study Guide Exam 3 – Part 1 Chapter 16: Licensing, Franchising and other Contractual Strategies • What does licensing refer to? 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. The franchisee is. Flashcards. One of the major differences when it comes to franchising vs. Table 7. Learn. C) A local firm allows the focal firm to blend into the local market, attracting less. The book connects to students of the technological age, facing a diverse and evolving economic environment fueled by. Franchising is a contractual international market entry mode as a licensing agreement when an organization wants to enter a foreign market quickly with low risk and resource commitment. Firstly, licensors can generate additional revenue streams by granting licenses to third parties, enabling them to enter new markets or expand their product offerings without significant investment. with direct or area franchise forms of licensing (P2a). Quiz 15: Licensing, Franchising, and Other Contractual Strategies. the positive or negative perception of firms and products from a certain country. 8 Target Market Selection. An Industrial Design is Intended to _____ Question 2. In this chapter, we address various types of cross-border contractual relationships, including licensing and franchising. Study with Quizlet and memorize flashcards containing terms like Inbound licenses, Outbound licensing, Contractual entry strategies in international business and more. make it difficult for later entrants to win business. International Business: The New Realities, 4e (Cavusgil) Chapter 15 Licensing, Franchising, and Other Contractual Strategies _____ 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. S. 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. Learn from your partner (and apply that knowledge within your organization) Study Chapter 5: Entry into Foreign Markets flashcards. 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. Chapter 16 - Licensing, Franchising, and Other Contractual Strategies. Franchising allows franchisors to function effectively with a much leaner organization. The license has much stricter restrictions than the franchise. -the amount of equity required affects the risk,return, and control that it will have in. 4 Understand franchising as an entry strategy. But, the organization has little control over technology and marketing. 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. Fast entry, low risk. Question 74. • 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. drive early entrants out of the market. 11). An industrial design is intended to ________. d. licensing is the limitation placed on licensing agreements. late. cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit contract intellectual property ideas or works created by individuals or firms, including discoveries and inventions; artistic, musical, and literary works; and words, phrases, symbols, and designs They are governed by a contract that provides the focal firm with moderate level of control over the foreign partner They typically include the exchange of intangibles and services Firms can pursue them independently or in conjunction with other entry strategies They provide dynamic, flexible choice They often reduce local perceptions of the. governed by a contract that provides the focal firm with moderate level of control over the foreign partner 2. Franchising VS Licensing. A modern approach to international business. As a disclosure, my company is a franchise providing. Key Challenges Faced by the Franchisee is the Decreased Likelihood. Revenues are usually more modest than with other entry strategies. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. Firms can pursue them independently or in conjunction with other entry strategies 4. 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,. Advantages. Verified Answer for the question: [Solved] Which of the following is an example of intellectual property? A) systems of measurement B) McDonald's golden arches C) an unpublished book D) a phone directory. But the Mouse’s actual 2023 number. The difference between a franchise contract and a licensing contract is that a. 47 I Use contemporary technology to minimize counterfeiting. When considering entering international markets, there are some significant strategic and tactical decisions to be made. Two common types of contractual entry strategies are licensing and franchising. What Are The Types of International Business. 1. Hotel firms typically do not make any equity investment in either of these modes, although some firms may combine non-equity arrangements with equity investments (Dunning, 1988). Foreign Direct Investment and Collaborative Ventures 408 15. 3. A number of foreign market entry modes exist, including: exporting, licensing, franchising, joint venture and wholly owned subsidiary. In franchise, a franchiser sells a property to the franchisee but controls over the procedures of the business. The article concludes by examining implications of this firm resource model of sustained competitive advantage for other. contractor supplies managerial know how. Exporting means sending goods produced in one country to sell them in another country. There are two major types of market entry modes: equity and non-equity. Ensuring ongoing competitive advantage. docx from BUS 417 at Zayed University. A) advanced economies B) economies with high PPP C) First World countriesthe statutory protections of franchise laws even if it wants to on advice of legal counsel. When it comes to retail entrepreneurship, there are several ways to open a. B. Special licensing arrangement; Contract between a parent company-franchisor and a franchisee that allows the franchisee to operate a business developed buy the franchisor in return for a fee and adherence to franchise-wide policies; Has great appeal to local entrepreneurs anxious to learn and apply Western-style marketing techniquesStudy with Quizlet and memorize flashcards containing terms like Starbucks' relentless pursuit of global market opportunities illustrates the fact that most firms face a broad range of strategy alternatives. The problems facing franchise companies in international transactions are relatively less formidable than those facing other service sectors. Geb 3375 Introduction to International Business – Study Guide Exam 3_ Part1 1 Introduction to International Business Study Guide Exam 3 – Part 1 Chapter 16: Licensing, Franchising and other Contractual Strategies With this chapter we continued the “entry strategies” part we had interrupted for exam 2. If you want to have more autonomy in business decisions with the freedom to make your own vision. Microfranchises: Franchises operated by one or two people. Ideas or works created by firms or individuals, such asintellectual property grants another firm the right to usethat property for a specified period of time in exchangeView Homework Help - Week 12. Typically include the exchange of intangibles and services. Match. Franchising iii. 4 ways to enter foreign markets. Flashcards. True. The globalization of franchising took off in the 1990s as a result of push factors (domestic. 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. 3. Compromises between short-term transactions and long-term solutions. 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. 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. 3 Describe the advantages and disadvantages of licensing. When considering a venture in international markets, there are some significant tactical and strategic decisions to be effected. 13 8. : Licensing is a contractual agreement in which a licensor grants a licensee the right to use its intellectual property,. strategic alliances. Securities law govern. Verified Answer for the question: [Solved] When compared to licensing agreements, the relationships established in franchising arrangements are typically volatile and short-term. 2. Accounting for 12% to 13% of British trade, these methods of earning money abroad have become more popular in recent years. 2. provides technical specifications to a subcontractor or local manufacturer. Study with Quizlet and memorize flashcards containing terms like 1) For Starbucks and other companies whose business models include a service component, it is not recommended that they use one of the following methods for going global. Question 80. Multiple Choice . Introduction. Franchising. 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. B) It ensures payment from the licensee to the licensor upon receipt of an export shipment. Verified Answer for the question: [Solved] The reputation of a licensor will be jeopardized by a licensing agreement if the licensee _____. Exporting 2. Importing involves purchasing products from other countries and reselling them in one’s own. These contractual methods can be seen in many forms such as international licensing and franchising. The costs of licensing and franchising vary widely depending on many factors. they typically include the exchange of intangibles and services 3. Study Licensing, franchising and other contractual strategies (Key Terms) flashcards from Lewis Mellor's class online, or in Brainscape's iPhone or Android app. Multiple Choice . Match. - contract provides focal firm with moderate level of control over foreign partner. Similarly, explicit contracts define franchising relationships. _Lic_Update (2). Franchising. Global Market Opportunity Assessment IV. Licensing: Licensing offers several benefits for both the licensor and the licensee. Subway is a company that has spread worldwide through its expansion strategy. 8. 15. B. 2. ability to preempt rivals and capture demand by establishing a strong brand name. Joint venture iii. 13 8. International Business: The New Realities, 4e (Cavusgil) Chapter 15 Licensing, Franchising, and Other Contractual Strategies _____ 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. Equity relations allow firms to have some direct control, while contractual does not. Payment is made only after you have completed your 1-on-1 session and are satisfied with your session. Licensing, Franchising, and Other Contractual Arrangements Michael Z. The contractual arrangements ( CA ) mode of entry is in most cases a stepping stone to international production. , Licensing Agreement, Copyright Licensing and more. Chapter 16- Licensing, Franchising, and Other Contractual Strategies Flashcards | Quizlet Chapter 16- Licensing, Franchising, and Other Contractual Strategies 5. and win! Microsoft Volume. 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. Licensing, Franchising, and Other Contractual Strategies Learning Objectives • Explain contractual entry strategies. 2. A) duty B). On the flip side, potential for revenue growth is more limited because the parent company will only earn a percentage of the earnings from each new store. Solved . 6 billion in revenues. Franchising: Arrangement in which the firm allows u000banother the right to use an entire business system in u000bexchange for fees, royalties or. 2. CONTRACTUAL ENTRY STRATEGIES Two common types of contractual entry strategies are licensing and franchising. (Video) Market Entry Strategies: Contractual Market Entry ModesLess control, licensee may become a competitor, legal and regulatory environment (IP and contract law) must be sound: Partnering and Strategic Alliance: Shared costs reduce investment needed, reduced risk, seen as local entity: Higher cost than exporting, licensing, or franchising; integration problems between two corporate. distributing or retailing products that are traditionally manufactured by the franchisor. RenaeBoleyn. a. 1. 5 Explain the advantages and disadvantages of franchising. 3. In franchising, the franchisor licenses the. Skip until Main Content. True/False . Multiple Choice . One of the major differences when it comes to franchising vs. Match. Ch 16: Licensing, Franchising, and other Contractual Strategies. Turnkey contracting. 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. Created by. Keep in mind, however, this is strictly the franchise fee and doesn’t include other startup costs to open the. Doc Preview. contractor supplies managerial know how. Less control, licensee may become a competitor, legal and regulatory environment (IP and contract law) must be sound: Partnering and Strategic Alliance: Shared costs reduce investment needed, reduced risk, seen as local entity: Higher cost than exporting, licensing, or franchising; integration problems between two corporate. B) They are more susceptible to volatility and risk compared to FDI. Choose from 29 different sets of Licensing, Franchising and other contractual strategies flashcards on Quizlet. S. ,. Learn vocabulary, terms, and more with flashcards, games, and other study tools. cross-border exchanges in which relationship between focal firm and foreign partner is governed by explicit contract. Franchising makes up 10% of the U. Human Resource Management. Licensing •A contractual agreement whereby one company (the licensor) makes an asset. wholly owned subsidiaries. Two Types of Contractual Relationships. 15. Change Message. 16: Licensing, Franchising, and Other Contractual Strategies unique aspects of. Match. A) Duty B) Residual C) Royalty D) Tariff Answer: CLicensing 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. Here are 10 market entry strategies you can use to sell your product internationally: 1. Expert Help. Its goal. C) use of a well-known, recognizable brand name D) The franchisee holds much power,. Brand licensing is the act of giving permission to another company to use your business’s intellectual property (IP). contract manufacturing. Cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit contract. IB Final review 80% A- / 90% A Chapter 16 Licensing, Franchising, and Other Contractual Strategies o Intellectual Property (IP): refers to ideas or works created by individuals or firms, including discoveries and inventions; artistic, musical, and literary works, and words, phrases, symbols, and designs Creation from the mind Licensing licenses. Franchising. 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. Study Chapter 16 - Licensing, Franchising and other Contractual Strategies flashcards from Tia-Jane Maggs's class online, or in Brainscape's iPhone or Android app. Angelica Weiss Chapter 16: Licensing, Franchising, and Other Contractual Strategies Contractual entry strategies in international business: cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit contract Intellectual property: ideas or works created by individuals or firms, including discoveries. External: Operating Enviornment. Contract manufacturing is when a firm enters into a contract with local manufacturers in foreign countries to get goods produced as per its specifications. 2 Understand licensing as an entry strategy. Exporting, joint ventures, direct investment, franchising, licensing, and various other forms of strategic alliance can be considered as market entry modes. The Franchiser requires the franchisee to make a minimum payment of $500 or more, and. 3. a. b. 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. Test. Unique Aspects of Contractual Relationships. Licensing involves granting rights to use intellectual property, while franchising grants rights to use an entire business model. 2 Exporting 7. One of the key differences between a franchise and a license is the limitation set out in licensing agreements. 2 ABSTRACT Presently, companies wanting to engage in international trade have a wide pool of choices to choose from. Advantages:The commercial center does this by familiarizing U. Greenfield Strategy v. Licensing is an arrangement by which the owner of intellectual property grants another firm the right to use that property for a specific time period in exchange for royalties or other compensation. Study with Quizlet and memorize flashcards containing terms like Strategic alliances involve: a. g. licensing vs franchising. Licensing, franchising and other contractual strategies. ENTERING AND OPERATING IN INTERNATIONAL MARKETS; 13. 6. embargo, In the context of various strategies for reaching global markets, which of the following strategies. Buckley BA (Econ), MA, Phd Chapter 90 Accesses Abstract This. Marketing in the Global Firm 464 17. What are Franchising? Franchising is an business agreement that includes the license is a trademark, of payment of a fee, and control over how the underlying franchises business has operated. Flashcards. B)It is an ownership-based international business activity. , licensing and franchising) have lower up-front costs than investment modes do. A number of foreign market entry modes exist, including: exporting, licensing, franchising, joint venture and wholly owned subsidiary. 3. The organization that obtains the access is the licensee. 6 Joint Ventures Chapter 8. Typically, the franchise agreement is for ten years. Docsity. 4. Essentially, it entails selling the rights to conduct a proprietary business to another individual, usually in a specified geographic region. 16 Licensing, Franchising, and Other Contractual Strategies. Staffing leverage . Low development cost and low risk in overseas expansion are advantages of this entry mode. Licensing is giving legal rights to in-market parties to use your company’s name and other intellectual property. - Firms that use licensing often can avoid expensive entry as is usually required in FDI. Direct strategies include joint ventures and wholly-owned subsidiaries/ greenfield investments (see Table 2).