Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Licensing and more. strategies. A franchise agreement is a contract between the business owner (franchisor) and the franchisee. Risk in franchising. Test. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. 5 Explain the advantages and disadvantages of franchising. " Early market entry is generally considered a competitive. Which mode is to be used in which situation 5. B) The franchisor holds much power, including superior bargaining power. management contracts. 1. The equity modes category includes joint ventures and wholly. Which of the following is provided by the licensor in a licensing agreement? A) a monetary down-payment plus royalties for all products sold. D) strategic decision making. Licensing and franchising are two international market entry strategies that businesses can use to expand their operations. 2 Exporting 7. Learn. Test. 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. Fresh features from the #1 AI-enhanced learning platform. One of the major differences when it comes to franchising vs. Multiple Choice . Internal: Strategic. Flashcards. A number of foreign market entry modes exist, including: exporting, licensing, franchising, joint venture and wholly owned subsidiary. Learn. Franchising VS Licensing. Key challenges faced by the franchisee is the decreased likelihood of operating an independent business. 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. Typically include the exchange of intangibles and services. Licensing typically involves royalties or. Your matched tutor provides personalized help according to your question details. Licensing A contractual agreement whereby one company (the. 3. There are six basic options available: (1) exporting, (2) licensing, (3) franchising, (4) creating a joint venture or strategic alliance (5) acquisition/creating a wholly owned subsidiary, and (6) greenfield/wholly owned subsidiary (Table 9. In 1974 the company started franchising in the USA and later it was uses in order to expand globally. Licensing involves granting rights to use intellectual property, while franchising grants rights to use an entire business model. Its goal. Disadvantages of licensing. and industry experts about instructions to franchise your business. 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. Contractual Entry Modes 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. 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. Global Market Opportunity Assessment 348. Test. True Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser and a franchisee that allows the franchisee to operate a business developed by the franchiser in return for all rights for operations. However, they enjoy a lot more freedom than franchisees. Licensing, Franchising, and Other Contractual Strategies. They generate a consistent, stable level of earnings from foreign operations. 15. e. patent. 3Describe the advantages and disadvantages of licensing. 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. 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. Test. They typically include the exchange of intangibles and services. 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. Patent licensing is one of the most expensive licensing. Methods for General Eintrittspreis into the Total Marketplace. 3. 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. On the other hand,. Licensing Agreement: A licensing agreement refers to a written agreement entered into by the contractual owner of a property or activity giving permission to another to use that property or engage. Detailed contracts and ongoing monitoring are equally as essential to the success of this international business strategy. A number of foreign market entry modes exist, including: exporting, licensing, franchising, joint venture and wholly owned subsidiary. Licensing concerns a product rights or the method of production marketing the product rights. Learn. Verified Answer for the question: [Solved] Which of the following is true about franchising as an entry strategy? A)It provides firms with minimum control over foreign operations. Solved . C) There is no scope to operate an independent. 6 Understand other contractual entry strategies. Patent. • Contractual entry strategies (franchising, licensing, management. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. Therefore, a franchise includes a licence. It reduces risks for both parties. Franchising VS Licensing. Franchising. 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. Create flashcards for FREE and quiz yourself with an interactive flipper. Focal firm has moderate level of control over the foreign partner. , Contractual alliances include all of the following except: a. export restraint b. Learn. Learn the basics of franchising and winning franchise growth strategies. 5. Contractual Entry Strategies Contractual entry strategies Two common types of contractual entry strategies are licensing andLicensing. It described the development of Chinese hotel industry at the end. 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. 47 I Use contemporary technology to minimize counterfeiting. 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. 15. The entry strategy in global business with the lowest risk is _____, while _____ is considered to have higher risk than the choices available. 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. Contractual entry strategies in international business. 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. 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. ( Multiple Choice) Question 2. Learn. 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. In franchise, a franchiser sells a property to the franchisee but controls over the procedures of the business. 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. Country Comparatives Guides. Although both franchising and MSCs are non-equity modes, there are important differences between. -most often begun with export. Firms can pursue them independently or in conjunction with other entry strategies. and industry leading guides that cover everything from francising principles to vorgeschritten franchise growth strategies. Flashcards. 8 Target Market Selection. Learn. 1 International-Expansion Entry Modes. Focal firm has moderate level of control over the foreign partner. AI Homework Help. Let’s take a look. Test. 1Explain contractual entry strategies. 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. 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 Resources. Outline the challenges facing professional service firms when they internationalize. Contractual Entry 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. It reduces risks for both parties. It is where a person (franchisor) who has developed a certain way of doing a business gives another. Buckley BA (Econ), MA, Phd Chapter 90 Accesses Abstract This. When considering a venture in international markets, there are some significant tactical and strategic decisions to be effected. The specific definition of the license. e. Try Shopify free for 3 days, no credit card required. turnkey contracting. 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. Franchising, on the other hand, is a business expansion model where a franchisor grants the rights. The firm that grants such authorization to the other firm is known as the licensor, and the firm in the foreign. Introduction. Licensing involves an agreement in which one company (licensor) grants another company (licensee) the right to use its intellectual property (e. 6. Type of Entry. View Homework Help - Week 4 - Subway Case. BUS. 15 Licensing, Franchising, and Other Contractual. Exporting. 11). University University of. Verified Answer for the question: [Solved] In a licensing agreement, ________ is responsible for local sales. 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. Licensing, Franchising and other Contractual Strategies. For example, Ranbaxy has licensing arrangement in countries like Indonesia and Jordan. From a licensee standpoint, there are fewer risks in product development, market testing, manufacturing, and distribution. Product Adaption. The organization that gives the access is the licensor. Contract Manufacturing: - This entry mode is a cross between licensing and investment entry. 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. Two Types of Contractual Relationships. About Press Copyright Contact us Creators Advertise Developers Terms Privacy Policy & Safety How YouTube works Test new features NFL Sunday Ticket. 3. Licensing, Franchising and Other Contractual Entry Strategies - Chapter 15. On the most basic level, the difference between a franchise and a license is the amount of support you can expect to receive. LICENSING AND FRANCHISING . Licensing of IPRs is at the heart of a franchise contract. Protecting Intellectual Property. 1 Explain contractual entry strategies. 2. a. When considering entering international markets, there are some significant strategic and tactical decisions to be made. Chapter 16 Licensing, Franchising, and Other Contractual Strategies Learning Objectives: 1. in exchange for royalties, license fees, or some other form of compensation Patent Trade secret Brand name Product formulations. Learn faster with spaced repetition. 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. Created by. Stage Three: Specify a specific format that is either equity based or contractual (nonequity based). 99/year Quiz 15: Licensing, Franchising, and Other Contractual Strategies. Flashcards. [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. RenaeBoleyn. 2. 3 Licensing 7. Licensing 2. By signing the franchise contract, a franchisee typically surrenders. Get Quality Help. Licensing is governed by a licensing agreement, which involves a one-time transfer of property or rights for a fee. Log in Join. Licensing gives a company greater control than franchising over the sale of its product in a target market. Learn from your partner (and apply that knowledge within your organization) Study Chapter 5: Entry into Foreign Markets flashcards. In addition to the standard license process, a company will assist in establishing the business with the design, equipment, organization, and marketing. 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 explicit contract. Licensing is a contractual arrangement where a company grants permission to another party to use its intellectual property or brand. management contracts. 5Explain the advantages and disadvantages of franchising. Low control, low local knowledge, potential negative environmental impact of transportation. On the other hand, franchising is a business model whereby a company (franchisor) allows another company (franchisee) to use its. 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. provides technical specifications to a subcontractor or local manufacturer. FDI in particular is now carried out not only by traditional MNEs but also by private investors, hedge funds, SOEs and even sovereign wealth funds. 3. Learn the differences between licensing and franchising and why licensing is not an optional to franchising. Low control, low local knowledge, potential negative environmental impact of transportation. Typically, this licence will cover know-how and other confidential information, trademarks. Create flashcards for FREE and quiz yourself with an interactive flipper. Test. 30. Quizlet flashcards, activities and games help you improve your grades. Our clients are winning for franchising. Licensing, Franchising, and Other Contractual Arrangements Michael Z. Question 2. Learn. focal firm does everything for business and hands it over to customer after training. 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 subsidiaryA franchise (or franchising) is a method of distributing products or services involving a franchisor, who establishes the brand’s trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor's name and system. 16: Licensing, Franchising, and Other Contractual Strategies Flashcards | Quizlet Ch. 1. License 101 Where lives Entering?. trademark. About Press Copyright Contact us Creators Advertise Developers Terms Privacy Policy & Safety How YouTube works Test new features NFL Sunday Ticket Press Copyright. But the Mouse’s actual 2023 number. Compromises between short-term transactions and long-term solutions. Two Types of Contractual Relationships. Many firms build biotech tags,. Chapter 8: Global Products. Licensing is a legal process in which one firm pays to use or distribute another firm's resources. Often regarded as second best to export or direct investment. True or false: Transportation costs would have an effect on which entry mode a company uses. Which of the following is key to licensing strategy success? Avoidance of barriers for foreign companies doing business. 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. foreign direct investment. Your matched tutor provides personalized help according to your question details. export restraint b. ENTERING AND OPERATING IN INTERNATIONAL MARKETS; 13. 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. accepting a franchise for dealing with the traditional products. Unique aspects of contractual relationships They are governed by a contract that provides the focal firm with moderate level of control over the foreign. Dispute settlement 4. A license is much more limited than a. The Franchiser requires the franchisee to make a minimum payment of $500 or more, and. S. The country-of-origin effect refers to _____. 4. Franchising 5. A) franchise contract is more specific and usually longer in duration. A license is much more limited than a franchise. Licensing specifies the territory as well as period. Conclusion. 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. when the franchisor has been successful domestically because of unique products and advantageous operating procedures and systems. Subway is a company that has spread worldwide through its expansion strategy. 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. The organization that obtains the access is the licensee. Recent advances in digitalization and increasing integration of international markets are paving the way for a new generation of firms to use non-traditional entry modes that are largely marginalized in previous entry mode studies. 16 Licensing, Franchising, and Other Contractual Strategies. 15- Licensing, Franchising and other. Mode Characteristics Advantages Disadvantages. Brand licensing is the act of giving permission to another company to use your business’s intellectual property (IP). Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser and. A license is “a contractually transferred right to use a legally protected or unprotected in vention in exchange for a fee or another type of compensation” (Mordhorst 1994, p. Either way, the licensor gets a kickback—as a. The most use contractual entry modes are Licensing, Franchising and Turnkey projects which is going to be explained below. In turnkey contracting, one or several firms plan, finance, organize, and. 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. doc from MANAGEMENT BCPC202 at University of Professional Studies,Accra. 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. b. The Five Common International-Expansion Entry Modes. Licensing, Franchising, and Other. Strategy 3: Franchising. With franchising, a foreign company essentially sets up a replica of the franchiser’s business, paying royalties and other fees to use its intellectual property, brand, and business model. master franchise. 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. CONTRACTUAL ENTRY STRATEGIES Two common types of contractual entry strategies are licensing and franchising. From a licensor standpoint, there are fewer risks in the selling and service of what is being. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Intellectual property rights and more. embargo, In the context of various strategies for reaching global markets, which of the following strategies. Low development cost and low risk in overseas expansion are advantages of this entry mode. 2 Understand licensing as an entry strategy. ) The many technological barriers to doing business globally. Question 4. 8. - includes exchange of intangibles and services. A licensing agreement is generally less complicated and easier to finalize than a franchise agreement. Foreign Direct Investment and Collaborative Ventures; 15. Licensing: Licensing is defined as "the method of foreign operation whereby a firm in one country agrees to permit a company in another country to use the manufacturing, processing, trademark, know-how or some other skill provided by the licensor". an advanced form of licensing in which the firm allows another the right to use an entire business system in exchange for fees, royalties, or other forms of compensation. Contract manufacturing is when a firm enters into a contract with local manufacturers in foreign countries to get goods produced as per its specifications. Licensing •A contractual agreement whereby one company (the licensor) makes an asset. Partnering, licensing, franchising, joint venture creation, business acquisition, and Greenfield ventures represent the spectrum of market entry opportunities. Learn. Includes such knowledge-based assets of the firm or individuals as industrial designs, trade secrets, inventions, works of art, literature, and other "creations of the mind". 7. 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. Match. 3 Describe the advantages and disadvantages of licensing. 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. 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. 15. C) licensing contract covers more aspects of operations. - Arrangement where owner of intellectual property grants another firm right to use property for specific time in exchange for royalties or other compensation. 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. A license allows the licensee to use, make and sell an idea, design, name, or logo for a fee. Find Flashcards. import/export, joint ventures d. 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. 2 Understand licensing as an entry strategy. Subscribe to newsletters Subscribe: $29. In this chapter, we address various types of cross-border contractual relationships, including licensing and franchising. Licensing agreement specifies nature of relationship between licensor and licensee. When the executives in charge of a firm decide to enter a new country, they must decide how to enter the country. licensing, don’t forget that they are separate concepts and each of them offers promising prospects. Patents provide inventors the right to prevent another person or company from selling or using an invention for up. 15. C) use of a well-known, recognizable brand name D) The franchisee holds much power,. D. 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. Docsity. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in International Business, Intellectual Property, Intellectual Property Rights and more. equity mode of entry into foreign markets limited to a contractual agreement. The contractual arrangements ( CA ) mode of entry is in most cases a stepping stone to international production. Expert Help. Flashcards. includes exchange of intangibles and services 3. Verified Answer for the question: [Solved] _____ is the world's leading licensing firm, with $56. 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; 6. a. Click the card to flip 👆. Uploaded By ebrarpatriot. Question 4. 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. Match. 15. Match. It is unusual to see a direct comparison between, say, licensing and joint ventures, or between franchising and subcontracting. As compared to other retailers, it is safe to say that IKEA has a unique organisational. Week 12 Licensing, Franchising, and Other Contractual Strategies 1. d. 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) _____. 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. One of the key differences between a franchise and a license is the limitation set out in licensing agreements. Abstract. S. Governed by : Contract law governs licensing. Greenfield Strategy v. 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 ". 6 Joint Ventures Chapter 8. They often. 1. Learn. Studying is made a lot easier and more fun with our online flashcards. Test. • Franchising vs licensing – Licensing of IPRs is an element of franchising – Licensing of IPRs is the means to reach the end • Goals of franchising – For the franchisor: geographically expand its busi ness without taking financial risks – For the franchisee: benefit from the brand, experi ence and know-how of the franchisor FranchisingSTRATEGY AND OPPORTUNITY ASSESSMENT FOR INTERNATIONAL BUSINESS; 11. 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. caitlyn_stryker. -risk. 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. c. In licensing, the licensor has limited control over the operations of the licensee, whereas franchising involves extensive control and support provided by the franchisor. Licensing. 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. Licensing, Franchising, and Other Contractual Strategies Learning Objectives • Explain contractual entry strategies. 4 Understand franchising as an entry strategy. 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. _Lic_Update (2). 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. 2. Flashcards. Devaluation decreases the value of currency in relation to other currencies. 1. Licensing is designed to reduce the risks involved in doing business for everyone involved. D)It is typically characterized as an unstable, short-term entry. In addition to paying an.