Which mode is to be used in which situation 5. Uploaded By ebrarpatriot. A licensing agreement allows a foreign company to sell a company’s. It is where a person (franchisor) who has developed a certain way of doing a business gives another. 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. franchising, wholly owned foreign subsidiaries b. Match. licensing is the limitation placed on licensing agreements. proficient interviews, and industry leading guides that cover everything from franchising basics to advanced franchise growth strategies. a. Strategy and Organization in the International Firm 316 12. Test. 15. 1 Advantages and Disadvantages of Di erent Modes of Internationalization. c. , licensing and franchising) have lower up-front costs than investment modes do. 3. Learn. foreign direct investment. a. 15. Test. Two Types of Contractual Relationships. Verified Answer for the question: [Solved] _____ is the world's leading licensing firm, with $56. Disney originally forecast shelling out a little more than $30 billion on content (including sports rights) in fiscal 2023, which ended Sept. 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. 4 Understand franchising as an entry strategy. 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. 4 Understand franchising as an entry strategy. B. The impact of strategy considerations can most easily be illustrated in a Cournot duopoly setting as displayed in Fig. Stage Three: Specify a specific format that is either equity based or contractual (nonequity based). strategic alliances. 4 illustrates the nature of the franchising agreement A typical. Chapter 15. Licensing is governed by a licensing agreement, which involves a one-time transfer of property or rights for a fee. 2. When the executives in charge of a firm decide to enter a new country, they must decide how to enter the country. trademark. 15 Licensing, Franchising, and Other Contractual. Multiple Choice . S. Direct exporting allows consumers or businesses in new markets to easily buy your products wholesale, where you handle the shipping. Match. Try Shopify free for 3 days, no credit card required. 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. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. is defined as a contractual arrangement whereby one company makes a legally protected asset available to another company in exchange for some form of compensation. View chapter 15. Fast entry, low risk. 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. From a licensor standpoint, there are fewer risks in the selling and service of what is being. 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. Difference between licensing and. The strategy is to deter other firms’ entry into the market. It is quite similar to the "franchise" operation. C) The licensee cannot cancel the contract with the. Contractual entry strategies in international business are cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an. Type of Entry. 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. Contract duration and renewal 2. Some firms view licensing as a supplementary strategy to other entry strategies, such as exporting or FDI. 2. Under a franchise agreement, a company grants a foreign company the right to use its brand name and sell its products. Verified Answer for the question: [Solved] _____ 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. When considering a venture in international markets, there are some significant tactical and strategic decisions to be effected. Flashcards. Franchising is a business model where the franchisor extends business know-how, intellectual rights and the right to operate in the name of a brand for consideration (usually in the form of fees and royalties) to the franchisee. The franchisee is. View Overview. 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. View LICENSING from BUSINESS A M0804455 at Ain Shams University. Coca Cola is an excellent example of licensing. Chapter 16 Licensing, Franchising, and Other Contractual Strategies Learning Objectives: 1. 2. Global Market Opportunity Assessment IV. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. 3 Licensing 7. ( Multiple Choice) Question 2. Exporting means sending goods produced in one country to sell them in another country. Which of the following is key to licensing strategy success? Avoidance of barriers for foreign companies doing business. Protecting Intellectual Property. Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser and. Licensing, Franchising and other Contractual Strategies P a g e 1 | 10 P a g e 2 | 10 Executive Summary The report discusses international modes • Compared to licensing, franchising is usually a much more stable, long-term entry strategy. Licensing, Franchising, and Other Contractual Strategies Internal: strategic Register IP target country chain1. Franchising. Create flashcards for FREE and quiz yourself with an interactive flipper. 3. Licensing vs Franchising The primary difference between a franchisee and a licensee is that franchisees can expect to have a much closer. 15. 70. Learn. Internal: Operational. 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. 11 “Market Entry Options”). Create flashcards for FREE and quiz yourself with an interactive flipper. Licensing, Franchising and other Contractual Strategies Cross-border contractual relationships: give permission to use intellectualWhen the executives in charge of a firm decide to enter a new country, they must decide how best to do it. Firms can pursue them independently or in conjunction with other entry strategies. Essentially, it entails selling the rights to conduct a proprietary business to another individual, usually in a specified geographic region. Subway is a company that has spread worldwide through its expansion strategy. " Early market entry is generally considered a competitive. Bashar Hassan. Advantages:The commercial center does this by familiarizing U. 3Describe the advantages and disadvantages of licensing. Fresh features from the #1 AI-enhanced learning platform. Exporting 2. equity mode of entry into foreign markets limited to a contractual agreement. Match. Which of the Following is Provided by the Licensor in a Licensing. Exporting and foreign direct investing are two common types of contractual entry strategies. Email This BlogThis! Share to Twitter Share to Facebook Share to Pinterest. Licensing and franchising are two international market entry strategies that businesses can use to expand their operations. When it comes to retail entrepreneurship, there are several ways to open a. Test. International Business: The New Realities, 5th Edition caters to a post-millennial student audience, the most diverse and educated generation to date. In addition to paying an. 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 ". It’s a legally binding document that spells out—in great detail— the integrated touch points of running the business from the franchisor and franchisee point of view. Ask AI New. Expert Help. Licensees also enjoy lowered risk because they're usually entering the marketplace with a known quantity and a built-in customer base. Question 14. Choose from 29 different sets of Licensing, Franchising and other contractual strategies flashcards on Quizlet. Zhao et al. 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. 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 (Table 7. Study with Quizlet and memorize flashcards containing terms like Licensing, franchising and other contractual strategies are considered _____ control strategies, Contractual Relationships between a focal firm and a foreign partner are, Intellectual Property refers to. With the export strategy the marginal cost of firm E is higher due to. B)It is an ownership-based international business activity. An industrial design is intended to ________. when the franchisor has been successful domestically because of unique products and advantageous operating procedures and systems. 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. Exporting is a method of expansion where. They generate a consistent, stable level of earnings from foreign operations. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. In the franchising packages trademarks, copyright, patents and other things often are included. University University of. Licensing is governed by a licensing agreement, which involves a one-time transfer of property or rights for a fee. C) There is no scope to operate an independent. export restraint b. 6 billion in revenues. Correct Answer: Access For Free . Flashcards. Outline the challenges facing professional service firms when they internationalize. B) An Indian automobile manufacturing company, buys engines from a Japanese manufacturer for its. Accounting for 12% to 13% of British trade, these methods of earning money abroad have become more popular in recent years. marijaazz. My Library. Markman et al. Many Indian firms can use licensing or franchising of the overseas market, particularly the developing countries. C. turnkey contracting. In this section, we will explore the traditional international-expansion entry modes. Licensing, Franchising, and Other Contractual Arrangements Michael Z. Browse With TopicA licensing agreement is a contract between two parties (the licensor and licensee) in which the licensor grants the licensee the right to use the brand name, trademark, patented technology, or ability to produce and sell goods owned by the licensor. Major global. Quiz 15: Licensing, Franchising, and Other Contractual Strategies Solved Professional Service Firms, Such as PriceWaterhouseCooper, Often Enter Large InternationalLike international licensing, international franchising has certain advantages and disadvantages. - contract provides focal firm with moderate level of control over foreign partner. b. ability to preempt rivals and capture demand by establishing a strong brand name. agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a. Contract Manufacturing: - This entry mode is a cross between licensing and investment entry. 15. 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. licensing. 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. Quiz 15: 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. Your matched tutor provides personalized help according to your question details. Franchising is governed. licensing is the limitation placed on licensing agreements. Cross-border exchanges in which the relationships between the focal firm and its foreign partner is governed by an explicit contract. Study with Quizlet and memorize flashcards containing terms like What does a contractual entry strategy in IB mean, Give forms of IP, What are the types of contractual relationships and more. 4. docx from INT- 113 at Southern New Hampshire University. and industry experts about instructions to franchise your business. ) The many technological barriers to doing business globally. • Contractual entry strategies (franchising, licensing, management. 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. 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. Licensing offers more controlBy expanding into new territories and regions via franchising, your company’s services are made available to a wider audience, both diversifying and localizing your reach. Question 1. Exporting entails selling products to foreign customers. 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. 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. A license allows the licensee to use, make and sell an idea, design, name, or logo for a fee. These options vary in terms of how. Exporting falls within the broad umbrella of market entry strategies that include a range of approaches to build international markets for your business. Chapter 15: Licensing, Franchising, and Other Contractual Strategies. 2. Patent licensing is one of the most expensive licensing. Here are 10 market entry strategies you can use to sell your product internationally: 1. Build trust, build interpersonal relationships, get to know each other, build an informal network between the 2 firms managers. Process. Leasing is Especially Beneficial to _____ Question 80. 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. The definition is important because franchises are covered by securities law while licenses are covered by contract law. Solved . Contractual Entry Strategies Contractual entry strategies Two common types of contractual entry strategies are licensing andLicensing. , Contractual alliances include all of the following except: a. 15. Provide dynamic, flexible choice. Strategic Management Chapter 7. Governed by a contract that provides the focal firm with a moderate level of control over the foreign partner. Therefore, a franchise includes a licence. . A) joint ventures B) licensing C) 100-percent ownership D) exporting E) franchising, 2) For Walt Disney. a. d. View MIB_8_MSLewandowska_2018_Fra. fFranchising as an Entry Strategy. In other words, a licensing agreement grants the licensee the ability to use intellectual. A franchise is a business model in which a business owner licenses their business to another individual or organization. _____ these are the items owned by a franchisee that has the same monetary value. If you think of a franchisor (the brand) as a. Licensing as an Entry Strategy a. Verified Answer for the question: [Solved] Which of the following is an advantage of franchising to the franchisee? A) reduced expenses as the franchisor provides supplies, equipment, and products B) Minimum initial investments or royalty payments are applicable. The costs of licensing and franchising vary widely depending on many factors. )*Licensing, Franchising, and Other Contractual 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 compensationLearn this differences between licensing and franchising and why licensing is not a alternative to franchising. final ch 15 man3600. 15. Licensing is giving legal rights to in-market parties to use your company’s name and other intellectual property. contract manufacturing. Terms in this set (22) contractual entry strategies in international business. Provide dynamic, flexible choice. Licensing, on the other hand, is a form of private contract between parties and. Licensing specifies the territory as well as period. Test. 99/year Quiz 15: Licensing, Franchising, and Other Contractual Strategies. B) They are more susceptible to volatility and risk compared to FDI. Describes the appearance or features of a product. Study Licensing, franchising and other contractual strategies (Key Terms) flashcards from Lewis Mellor's class online, or in Brainscape's iPhone or Android app. Turnkey Project b. -risk. 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 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. When a firm allows others toIn Malaysia, franchising and licensing are governed under different laws. The contractual arrangements ( CA ) mode of entry is in most cases a stepping stone to international production. Type of Entry. However, they enjoy a lot more freedom than franchisees. • About 70 percent of the more than 2,000 Body Shop stores worldwide are operated by franchisees, while the rest are owned by Body Shop headquarters. Franchising, on the other hand, is a business expansion model where a franchisor grants the rights. provides technical specifications to a subcontractor or local manufacturer. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Licensing and more. 2 Exporting 7. •Franchising is an advanced form of licensing in which the focal firm, the franchisor,. Chapter 8: Global Products. 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. trading bloc c. S. 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). -flexibility. Licensees can re-sell the IP at a higher price or manufacture merchandise with the IP on it. Study Licensing, franchising and other contractual strategies (Key Terms) flashcards from Lewis Mellor's class online, or in Brainscape's iPhone or Android app. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, intellectual property, intellectual property rights and more. other contractual agreements and equity modes (wholly owned subsidiary or joint venture). Flashcards. gives the owner the exclusive right to reproduce art, music, literature, software, and other such works, as well as prepare derivative works, or distribute copies know how licensing Involves a contract in which the focal firm provides technological or management knowledge about how to design, manufacture, or deliver a product or a service. [2] defined market entry as "a planned move into a new or adjacent market for the creation and delivery of offerings. Direct strategies include joint ventures and wholly-owned subsidiaries/ greenfield investments (see Table 2). 2. 6. Find Flashcards. pdf from ECON 102 at Warsaw School of Economics. Equity-based arrangements. Licensing, Franchising, and Other Contractual Strategies 438 Part 5 Functional Area Excellence 464 16. - Arrangement where owner of intellectual property grants another firm right to use property for specific time in exchange for royalties or other compensation. make it difficult for later entrants to win business. (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. Franchising VS Licensing. Created by. Meaning. Joint venture iii. 1. In some cases, it’s either for five years or can be for 20 years. Solved . Either way, the licensor gets a kickback—as a. A licensing agreement is generally less complicated and easier to finalize than a franchise agreement. late. Learn faster with spaced repetition. - As entry strategy, licensing requires neither substantial capital investment nor extensive involvement of licensor in foreign markets. 1 Licensing. An industrial design is intended to _____. 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. Learn vocabulary, terms, and more with flashcards, games, and other study tools. 1. Focal firm has moderate level of control over the foreign partner. Expert Help. Exporting. Advantages. Verified Answer for the question: [Solved] In a licensing agreement, ________ is responsible for local sales. RenaeBoleyn. 2 ABSTRACT Presently, companies wanting to engage in international trade have a wide pool of choices to choose from. -resource commitment. Management Contract 4. Franchising suggests the use of a whole package of signature products and business solutions, whereas licensing allows entrepreneurs to leverage certain individual property and produce and. Options for CONTRACTS include co-marketing, R&D contracts, turnkey project, strategic supplier/distributor, licensing/franchising. intellectual property Ideas or works that individuals or firms create, including discoveries and inventions; artistic, musical, and literary works; and words, phrases, symbols, and designs. Contractual entry strategies 2. International Business: The New Realities, 5e (Cavusgil) Chapter 15 Licensing, Franchising, and Other Contractual Strategies 1) 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. Learn this differs between licensing and franchising and why general is not an alternative for franchising. Firms often combine franchising with other entry strategies. 2. Study with Quizlet and memorize flashcards containing terms like Inbound licenses, Outbound licensing, Contractual entry strategies in international business and more. Strategy 3: Franchising. Licensing is expensive and it requires process like agreement & It is similar as Franchise Operation. contractor supplies managerial know how. contractual agreements. cross-border exchanges in which relationship between the focal firm and its. The principal advantages of international franchising are: (i) Franchising is a beneficial way to. 15. Ch. In 1974 the company started franchising in the USA and later it was uses in order to expand globally. By signing the franchise contract, a franchisee typically surrenders. Learn the basics of franchising and winning franchise growth strategies. Learn. chapter 16 licensing, franchising, and other contractual contractual entry strategies in international business: exchanges where the relationship between the. What are unique aspect of contractual relationship (5) 1. The license agreement permits the use of trademarks, nothing more. Created by. Licensing and franchising. Homework Help. a. *Granting a right to use property to others. A) should bribe government officials to ensure protection of intellectual property B) should register patents and copyrights with local governments C) should keep information about intellectual property confidential from all franchisees in. Licensing is a legal process in which one firm pays to use or distribute another firm's resources. Flashcards. Licensing is a legal process in which one firm pays to use or distribute another firm's resources. Mode Characteristics Advantages Disadvantages. 15. 2 Understand licensing as an entry strategy. Licensing: An arrangement in which the owner of intellectual property. If you want to have more autonomy in business decisions with the freedom to make your own vision. Greenfield Strategy v. In franchise, a franchiser sells a property to the franchisee but controls over the procedures of the business. 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 different modes can be further classified on the basis of equity or non-equity requirements. The History of Franchising* I. licensing, don’t forget that they are separate concepts and each of them offers promising prospects. Under an international franchise agreement, a company (the franchiser) grants a foreign company (the franchisee) the right to use its brand name and to sell its products or services. 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. Ch. Patent licensing is a licensing that a licensor gives to the licensee to grant permission to conduct patent activities. An Industrial Design is Intended to _____ Question 2. Studying is made a lot easier and more fun with our online flashcards. Switzerland is a country that has revaluated its currency—this does not happen often. import/export, licensing c. Licensing, Franchising and Other Contractual Entry Strategies - Chapter 15. Contractual entry strategies in int’l business – cross border exchanges where the. Question 14. : Licensing is a contractual agreement in which a licensor grants a licensee the right to use its intellectual property,. cross-border exchanges in which the relationship between the focal firm & its foreign partner is governed by an. governed by a contract that provides the focal firm with moderate level of control over the foreign partner 2. Licensing 2. It reduces risks for both parties. Licensing: Licensing offers several benefits for both the licensor and the licensee. Skip until Main Content. In licensing/franchising, the organization sells the rights to intellectual property to an entity within a foreign market for a royalty fee.