. provides technical specifications to a subcontractor or local manufacturer. S. Email This BlogThis! Share to Twitter Share to Facebook Share to Pinterest. Some companies use direct exporting, in which they sell the product they manufacture in international markets without third-party. c. trademark. Provide dynamic, flexible choice. they are governed by a contract that provides the focal firm with a moderate level of control over the foreign partner 2. From a licensor standpoint, there are fewer risks in the selling and service of what is being. Your matched tutor provides personalized help according to your question details. Here are 10 market entry strategies you can use to sell your product internationally: 1. Homework Help. Licensing is an arrangement by which the owner of intellectual property grants another. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, intellectual property, intellectual property rights and more. D) strategic decision making. Ch. [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. Change Product. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. licensing team. 1. 1 Explain contractual entry strategies. Ask AI New. Flashcards. Licensing is an agreement between Licensor and licensee wherein one organization gives the other organization access to its patents, trade secrets, or technology for a fee known as a royalty. Focal firm has moderate level of control over the foreign partner. Franchising is an arrangement in which the. Can be pursued independently or in conjunction with other entry strategies. 3. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, intellectual property, intellectual property rights and more. Exporting means sending goods produced in one country to sell them in another country. When considering the three basic decisions a firm must make when it decides to enter a foreign market, it must determine the market. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in IB, Licensing def, Licensing pro and more. The nation lacks the skilled labor and technical know-how to handle such large-scale projects. 1 International-Expansion Entry Modes. Exporting and foreign direct investing are two common types of contractual entry strategies. docx from BUS 417 at Zayed University. View BUS 417 . To sum up, there are various methods that a firm can utilize in its foreign market entry market strategy. 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. RenaeBoleyn. Two common types of contractual entry strategies are licensing and franchising. franchising, wholly owned foreign subsidiaries b. B) It ensures payment from the licensee to the licensor upon receipt of an export shipment. 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 and inventions; artistic, musical. equity mode of entry into foreign markets limited to a contractual agreement. Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Licensing and more. contract manufacturing. 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. trading bloc c. Market entry modes for international businesses. B) The franchisor holds much power, including superior bargaining power. Franchising. 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. If you want to have more autonomy in business decisions with the freedom to make your own vision. 5. Licensing/franchising also opens the doors. 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. CHAPTER 15 LICENSING FRANCHISING AND. In this section, we will explore the traditional international-expansion entry modes. - As entry strategy, licensing requires neither substantial capital investment nor extensive involvement of licensor in foreign markets. Bashar Hassan. Unique aspects of contractual relationships They are governed by a contract that provides the focal firm with moderate level of control over the foreign. My Library. School Anadolu University; Course Title BUS 1332; Type. Solved . Study with Quizlet and memorize flashcards containing terms like Inbound licenses, Outbound licensing, Contractual entry strategies in international business and more. Reasons for Licensing:Get Quality Help. give later entrants a cost advantage over early entrants. thecashchicken. Terms: a. Two common types of contractual entry strategies are licensing and franchising. B. Flashcards. 16: Licensing, Franchising, and Other Contractual Strategies unique aspects of. embargo, In the context of various strategies for reaching global markets, which of the following strategies. Typically, this licence will cover know-how and other confidential information, trademarks. Fast entry, low risk. 4. Disadvantages of licensing. chapter 16 licensing, franchising, and other contractual contractual entry strategies in international business: exchanges where the relationship between the. , Licensing Agreement, Copyright Licensing and more. In Licensing agreement and franchise, an overseas-based business will pay you a royalty or commission to use your. Meaning. licensing. Several companies get patent their technology and other products that they don’t want anyone else to use without their consent. -resource commitment. 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. 3Describe the advantages and disadvantages of licensing. Licensing is governed by a licensing agreement, which involves a one-time transfer of property or rights for a fee. 2. 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. Verified Answer for the question: [Solved] In a licensing agreement, ________ is responsible for local sales. Match. 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. 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. 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. Match. Flashcards. 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. Question 1. Learn from your partner (and apply that knowledge within your organization) Study Chapter 5: Entry into Foreign Markets flashcards. 15. Brand licensing is the act of giving permission to another company to use your business’s intellectual property (IP). Flashcards. Study with Quizlet and memorize flashcards containing terms like Inbound licenses, Outbound licensing, Contractual entry strategies in international business and more. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Licensing and more. A license is much more limited than a franchise. For example, a restaurant or a salon can be franchised, but not the products they use to provide the said services. Build trust, build interpersonal relationships, get to know each other, build an informal network between the 2 firms managers. 4 Franchising 7. ,. Licensing, Franchising and Other Contractual Entry Strategies - Chapter 15. Switzerland is a country that has revaluated its currency—this does not happen often. In licensing/franchising, the organization sells the rights to intellectual property to an entity within a foreign market for a royalty fee. Franchising. patent. First, mature products in a domestic market might find new growth opportunities overseas. if the franchisor has already achieved considerable success in franchising in its domestic market. They typically include the exchange of intangibles. Franchising, on the other hand, is a business expansion model where a franchisor grants the rights. A strategic alliance is a collaborative agreement between two or more companies to pursue mutually beneficial objectives. A) franchise contract is more specific and usually longer in duration. Accounting for 12% to 13% of British trade, these methods of earning money abroad have become more popular in recent years. 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. The entry strategy in global business with the lowest risk is _____, while _____ is considered to have higher risk than the choices available. Equity-based arrangements. In this chapter, we address various types of cross-border contractual relationships, including licensing and franchising. B)It is an ownership-based international business activity. Question 74. Either way, the licensor gets a kickback—as a. The main reasons companies form strategic alliances are to gain access. Firms can pursue them independently or in conjunction with other entry strategies. Most Business document from University of British Columbia, 26 pages, BUS 434 Market Entry Licensing, Franchising, and Other Contractual Strategies 1-1 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 • Understand other contractual entry strategies. The five most common methods include exporting, licensing and franchising, partnering and strategic alliance, acquisition, and Greenfield venture. 4 Understand franchising as an entry strategy. True or false: Transportation costs would have an effect on which entry mode a company uses. • Understand licensing as an entry strategy. Question 2. ) Bringing ideas for business in other countries to new markets. Licensing is governed by a licensing agreement, which involves a one-time transfer of property or rights for a fee. Patent licensing is a licensing that a licensor gives to the licensee to grant permission to conduct patent activities. Stage Three: Specify a specific format that is either equity based or contractual (nonequity based). make it easy for later entrants to win business. In deciding which method to adopt, it is important that a firm evaluate each entry mode’s. Strategy and Organization in the International Firm 316 12. A license allows the licensee to use, make and sell an idea, design, name, or logo for a fee. According to Franchise Business Review, franchising fees typically range from $25,000-$50,000 on average. Licensing,. Advantages. View Test Prep - licensing and franchising from ECONOMICS 12 at Xavier Institute Of Management & Research. 5 Contract Manufacturing 7. Risk in franchising. By signing the franchise contract, a franchisee typically surrenders. Licensing, Franchising, and Other Contractual Arrangements Michael Z. 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. OTHER CONTRACTUAL ENTRY STRATEGIES -Under build-operate-transfer (BOT) arrangements, the firm contracts to build a major facility, such as a power plant, which it operates for a period of years and then transfers to the host-country government or other public entity. Licensing is a contractual agreement whereby one company (the licensor) makes a legally protected asset available to another company (the license) in exchange for royalties, license fees, or some other form of compensation. By entering your email, you agree to receive marketing emails from Shopify. reduce local perceptions of the focal firm as a foreign enterprise Study with Quizlet and memorize flashcards containing terms like 1. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Licensing, Franchising, and Other. Franchising is another variation of licensing strategy. D) franchise contract involves less control and. 3. , Licensing is a contractual agreement whereby one company (the licensor) makes a legally protected asset available to another company (the licensee) in. turnkey contracting. The organization that obtains the access is the licensee. 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 and more. Why would a company choose to use a contractual mode of entry rather than an investment mode? Contractual forms of entry (i. Franchising makes up 10% of the U. When considering a venture in international markets, there are some significant tactical and strategic decisions to be effected. When considering entering international markets, there are some significant strategic and tactical decisions to be made. distributing or retailing products that are traditionally manufactured by the franchisor. Study Chapter 16 flashcards. U. 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". 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. Get Quality Help. The country-of-origin effect refers to _____. Licensing and Franchising. B) franchise contract must include a foreign government. International Business: The New Realities, 5th Edition caters to a post-millennial student audience, the most diverse and educated generation to date. When considering a venture in international markets, there are some significant tactical and strategic decisions to be effected. A) A joint venture B) Contract manufacturing C) Licensing D) Exporting E) A Global strategic alliance; Answer: B. 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. It’s crucial to understand the key differences and similarities between these two popular growth strategies. Essentially, it entails selling the rights to conduct a proprietary business to another individual, usually in a specified geographic region. Turnkey Project b. Posted by Rully Mangunsong at 10:16 AM. Verified Answer for the question: [Solved] Which of the following is characteristic of exclusive licensing agreements? A) The licensor is not allowed to interfere with the production or marketing of the licensed asset. Ch. With the export strategy the marginal cost of firm E is higher due to. C) licensing contract covers more aspects of operations. On the other hand, franchise agreements allow the use of trademarks, additional intellectual. b. Flashcards. 82. Licensing of IPRs is at the heart of a franchise contract. Key Challenges Faced by the Franchisee is the Decreased Likelihood. Internal: Strategic. , patents, trademarks, copyrights) in exchange for a fee or royalty payment. - Arrangement where owner of intellectual property grants another firm right to use property for specific time in exchange for royalties or other compensation. They typically include the exchange of intangibles and services. When it comes to retail entrepreneurship, there are several ways to open a. How Aristotle can help: the philosophy of business If your company is ever going to implement a successful licensing strategy, the corporate licensing team had better take to heart the wisdom of Aristotle. 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. Merger and Acquisition ii. Study with Quizlet and memorize flashcards containing terms like 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. Learn. c. 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. The problems facing franchise companies in international transactions are relatively less formidable than those facing other service sectors. 11). 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 ". Strategic alliances can take many different forms, such as joint ventures, licensing agreements, and marketing alliances. 16 Licensing, Franchising, and Other Contractual Strategies. Foreign Direct Investment and Collaborative Ventures; 15. C) They attract less attention and less of the criticism sometimes directed at firms. 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. Licensing, Franchising, and Other Contractual Strategies. Internal: Strategic. 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. But the Mouse’s actual 2023 number. Verified Answer for the question: [Solved] Before undertaking contractual entry strategies abroad, management _____. AI Homework Help. The licensor provides no technical support or assistance in most cases. 8 Target Market Selection. Study Resources. 2. Internal: Operational. 15. Terms in this set (12) Contractual entry strategies in international business. A licensing is an agreement whereby a licensor grants the rights to intangible property (patents, inventions, formulas, processes, designs, copyrights, and trademarks) to another entity (licensee) for a specified period and in return, the licensor receives a royalty/fee from the licensee. Strategic Management Chapter 7. )*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. 4 ways to enter foreign markets. Joint venture iii. C. 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. Licensing. Exporting falls within the broad umbrella of market entry strategies that include a range of approaches to build international markets for your business. 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. When the executives in charge of a firm decide to enter a new country, they must decide how to enter the country. Create flashcards for FREE and quiz yourself with an interactive flipper. ( Multiple Choice) Question 2. com Licensing • A company (licensor) grants rights to intangible property to another company (licensee). Licensing refers to a business arrangement, where a company (licensor) sells its intellectual property to another company (licensee), or the right to produce its products, for a specified fee (royalty). View chapter 15. Exporting and Foreign Direct Investing are Two Common Types of Contractual. Greenfield Strategy v. 2 ABSTRACT Presently, companies wanting to engage in international trade have a wide pool of choices to choose from. True/False . Learn. Brooke MA, PhD, FIEx & Peter J. 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. For courses in international business. final ch 15 man3600. includes exchange of intangibles and services 3. 3 Licensing 7. Build trust, build interpersonal relationships, get to know each other, build an informal network between the 2 firms managers. Direct exporters often sell directly to a consumer (B2C), a business (B2B), or a distributor in a foreign country. Chapter 15: Licensing, Franchising, and Other Contractual Strategies Key Elements Contractual Entry strategies in. A. Study Licensing, franchising and other contractual strategies (Key Terms) flashcards from Lewis Mellor's class online, or in Brainscape's iPhone or Android app. 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. Type of Entry. governed by a contract that provides the focal firm with moderate level of control over the foreign partner 2. Management Service Contracts A management service contract is a long-term agreement, of up to ten years or even longer, whereby the legal owners of the property and real estate enter into a. External: Operating Enviornment. gives an inventor the right to prevent others from using or selling an invention for a fixed period-typically up to 20 years. 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. Chapter 15 Licensing, Franchising and other Contractual Strategies Internatonal Business: Other mark ups and contributions like finance charges, sale of related products etc. Typically, franchise agreements require a longer-term commitment from both parties involved, usually ten years or more, while management contracts tend to be shorter-term agreements, usually ranging from one to five years. 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. proficient interviews, and industry leading guides that cover everything from franchising basics to advanced franchise growth strategies. Test. AFM 333 – Ch 16 Licensing, Franchising, and Other Contractual Strategies. Total views 38. 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. IBUS CH 15 Licensing, Franchising, and Other Contractual Strategies. The non-equity modes category includes export and contractual agreements. 15. The Franchiser requires the franchisee to make a minimum payment of $500 or more, and. Brand owners lease their patents, software, or characters to other companies. True/False . 1 International Entry Modes 7. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. One of the key differences between a franchise and a license is the limitation set out in licensing agreements. 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. When a firm allows others toIn Malaysia, franchising and licensing are governed under different laws. Created by. nontariff barrier d. Contractual entry strategies in international business. . 70. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in IB, Intellectual Property, Contractual Entry Strategies and more. 1. Patent licensing is one of the most expensive licensing. Chapter 15. OTHER STRATEGIC ALLIANCES i. Franchisee: A franchisee is a small business owner that purchases the right to use an existing business's trademarks, associated brands, and other proprietary knowledge. b. 15. Question 14. Both licensing and franchising are really fantastic. The license has much stricter restrictions than the franchise. - includes exchange of intangibles and services. 6. and win! Microsoft Volume. The most use contractual entry modes are Licensing, Franchising and Turnkey projects which is going to be explained below. Licensing agreement specifies nature of relationship between licensor and licensee. The Franchiser maintains significant control of, or provides significant assistance to, the franchisee’s operation methods. to a foreign partner in exchange for a continuous the firm allows another the right to use an specific products, as well as the rights to distribute. Learn faster with spaced repetition. 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. Created by. 1. Choose from 29 different sets of Licensing, Franchising and other contractual strategies flashcards on Quizlet. fAdvantages & Disadvantages of. Direct exporting allows consumers or businesses in new markets to easily buy your products wholesale, where you handle the shipping. Intellectual property describes. by Cavusgil, Knight & Riesenberger. 2 Exporting 7. Exporting, joint ventures, direct investment, franchising, licensing, and various other forms of strategic alliance can be considered as market entry modes. Flashcards. Setting up a new wholly owned subsidiary in the host country. 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. Either way, the licensor gets a kickback—as a. 3. University University of. Its goal. The most common methods firms join international trade are through contractual entry strategies such as direct exporting, franchising, licensing, management contract, contract manufacturing, buying a company, and joint ventures. Pages 6. Contractual Entry Strategies. 1. The book connects to students of the technological age, facing a diverse and evolving economic environment fueled by. Describes the appearance or features of a product. However, they enjoy a lot more freedom than franchisees. 1. Many firms build biotech tags,. 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. While extant research revolves around the level of resource commitment and control in foreign activities, non-traditional. 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. cross-border contractual relationships share several common characteristics. -flexibility. Licensing 4. A number of foreign market entry modes exist, including: exporting, licensing, franchising, joint venture and wholly owned subsidiary. Contractual entry strategies in international business Click the card to flip 👆 cross-border exchanges in which relationship between the focal firm and its foreign partner is governed by an explicit contract Licensing, Franchising and other Contractual Strategies International Business Strategy, Management. In addition to the standard license process, a company will assist in establishing the business with the design, equipment, organization, and marketing. A license is much more limited than a.