1. International Business Strategy, Management & the New Realities. proficient interviews, and industry leading guides that cover everything from franchising basics to advanced franchise growth strategies. View Any. • Licensing, franchising and other contracting These activities are carried out by a wide variety of institutions such as MNEs, small and medium-sized enterprises and financial entities. 3. Chapter 16: Licensing, Franchising and other Contractual Strategies. Licensing is a legal process in which one firm pays to use or distribute another firm's resources. Although both franchising and MSCs are non-equity modes, there are important differences between. 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) _____. Pages 6. Fresh features from the #1 AI-enhanced learning platform. Market entry modes for international businesses. , Licensing Agreement, Copyright Licensing and more. 2. 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. 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). Human Resource Management. The franchisee is. 4 Understand franchising as an entry strategy. Licensing, Franchising, and Other Contractual Strategies Internal: strategic Register IP target country chain1. My. 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. Which mode is to be used in which situation 5. L11 - Licensing, Franchising and other contractual strategies - Virginia Cathro study guide by Rebecca_Stevenson6 includes 36 questions covering vocabulary, terms and more. Lisanslama, Franchising ve diğer Sözleşme Stratejileri Learn with flashcards, games, and more — for free. Similar to exporting, licensing is an easy way for a company to enter an international market quickly and without the need for laying out much capital. 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. ( Multiple Choice) Question 2. 15. Question 74. About Press Copyright Contact us Creators Advertise Developers Terms Privacy Policy & Safety How YouTube works Test new features NFL Sunday Ticket Press Copyright. Flashcards. 1. In some cases, it’s either for five years or can be for 20 years. Licensing 2. Flashcards. 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. Switching costs: A. It stated the market entry strategies of global hotel industry followed Cruz (1999)’s ‘Management Contract first, franchising latter’ strategy. 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. c. Licensing term can be defined as “The method of operating in other country wherein a Firm of one country agrees to permit a company in another country to use the manufacturing, Processing, Trademark & other skill provided by the Licensor”. Uploaded By ebrarpatriot. 2. These options vary in terms of how. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in International Business, Intellectual Property, Intellectual Property Rights and more. Voluntary agreements between 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. S. 3. Disadvantages of franchising to the franchisee. Studying is made a lot easier and more fun with our online flashcards. Master Franchise. Build trust, build interpersonal relationships, get to know each other, build an informal network between the 2 firms managers. Learn this differs between licensing and franchising and why general is not an alternative for franchising. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. Brand owners lease their patents, software, or characters to other companies. Create flashcards for FREE and quiz yourself with an interactive flipper. Focal firm has moderate level of control over the foreign partner. In existing literature, most strategies are appraised as alternatives to exporting, or as alternatives to green-field FDI. Licensees can re-sell the IP at a higher price or manufacture merchandise with the IP on it. Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser and. In deciding which method to adopt, it is important that a firm evaluate each entry mode’s. : Licensing is a contractual agreement in which a licensor grants a licensee the right to use its intellectual property,. 2. -risk. The definition is important because franchises are covered by securities law while licenses are covered by contract law. The History of Franchising* I. Contract duration and renewal 2. Management Contract 4. It. Since franchisees will assume many of the responsibilities otherwise shouldered by. Exporting means sending goods produced in one country to sell them in another country. OTHER STRATEGIC ALLIANCES i. e. cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit. a. Franchising. Partnering, licensing, franchising, joint venture creation, business acquisition, and Greenfield ventures represent the spectrum of market entry opportunities. 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. " Early market entry is generally considered a competitive. A) A joint venture B) Contract manufacturing C) Licensing D) Exporting E) A Global strategic alliance; Answer: B. BUS. C) They attract less attention and less of the criticism sometimes directed at firms. Study Licensing, franchising and other contractual strategies (Key Terms) flashcards from Lewis Mellor's class online, or in Brainscape's iPhone or Android app. Franchising VS Licensing. 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. Learn. trading bloc c. Both licensing and franchising are really fantastic. B) An Indian automobile manufacturing company buys engines from a Japanese manufacturer for its. Equity-based arrangements. Verified Answer for the question: [Solved] Azoo Government Projects (Scenario) The nation of Azoo needs the assistance of a contractor to construct a new bridge and a subway system. Licensing 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. contractual agreements. About Press Copyright Contact us Creators Advertise Developers Terms Privacy Policy & Safety How YouTube works Test new features NFL Sunday Ticket. Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. d. 3 Describe the advantages and disadvantages of licensing. cross border interaction between focal firm and foreign firm governed by a contract. Contract manufacturing is when a firm enters into a contract with local manufacturers in foreign countries to get goods produced as per its specifications. In franchising, decision rights encompass the assignment of rights for use of system- and outlet-specific assets in contracts. The nation lacks the skilled labor and technical know-how to handle such large-scale projects. A. Exporting. 2. When the parties make licensing or franchising agreement, the parties should critically. _____ these are the items owned by a franchisee that has the same monetary value. Exporting entails selling products to foreign customers. Either way, the licensor gets a kickback—as a. give later entrants a cost advantage over early entrants. 2 Franchising as an expansion strategy. 6. Licensing, Franchising and other Contractual Strategies Cross-border contractual relationships: give permission to use intellectual When the executives in charge of a firm decide to enter a new country, they must decide how best to do it. Process. 25 “Market entry options”). Licensing is giving legal rights to in-market parties to use your company’s name and other intellectual property. Licensing, Franchising, and Other Contractual Strategies. Firms can pursue them independently or in conjunction with other entry strategies. 15. Contractual entry strategies 2. The non-equity modes category includes export and contractual agreements. Devaluation decreases the value of currency in relation to other currencies. 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. Market entry modes for international businesses. Contract manufacturing is also called outsourcing. It's also easier for the company to extricate itself from the situation if the results aren't favorable. 1. 3. real business leading guides that top everything from franchises basics to advanced vote growth strategies. They typically include the exchange of intangibles and services. dynamic, flexible choices 5. Question 74. A licensing agreement allows a foreign company to sell a company’s. Meaning. In Licensing agreement and franchise, an overseas-based business will pay you a royalty or commission to use your. 15. When the executives in charge of a firm decide to enter a new country, they must decide how to enter the country. Licensing. Question 4. Major global. 3. Can be pursued independently or in conjunction with other entry strategies. Created by. Franchising VS Licensing. 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. In licensing/franchising, the organization sells the rights to intellectual property to an entity within a foreign market for a royalty fee. Exporting. AI Homework Help. Solved . 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. Franchising: Arrangement in which the firm allows u000banother the right to use an entire business system in u000bexchange for fees, royalties or. Its goal. trademark. Let’s take a look. 3. fFranchising as an Entry Strategy. Type of Entry. , Licensing. 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. 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. patent. Foreign Direct Investment and Collaborative Ventures 408 15. 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. Low control, low local knowledge, potential negative environmental impact of transportation. 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. 4 Understand franchising as an entry strategy. Process. External: Operating Enviornment. Test. C)It restricts a firm's ability to expand more rapidly abroad. 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. 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. Terms: a. In licensing, the licensor has limited control over the operations of the licensee, whereas franchising involves extensive control and support provided by the franchisor. In franchising, the franchisor licenses the. - contract provides focal firm with moderate level of control over foreign partner. Fast entry, low risk. The organization that gives the access is the licensor. The main difference between the two is the duration of the commitment involved. licensing team. Subscribe to newsletters Subscribe: $29. Turnkey contracting. CONTRACTUAL STRATEGIC ALLIANCES i. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, intellectual property, intellectual property rights and more. Payment is made only after you have completed your 1-on-1 session and are satisfied with your session. True/False . Chapter 15. CHAPTER 15 LICENSING FRANCHISING AND. When a business enters a foreign market after other foreign firms, the situation is defined as ______ entry. (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. For example, a restaurant or a salon can be franchised, but not the products they use to provide the said services. Franchising. 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. Many firms build biotech tags,. c. provides technical specifications to a subcontractor or local manufacturer. 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. B) An Indian automobile manufacturing company, buys engines from a Japanese manufacturer for its. 15. As compared to other retailers, it is safe to say that IKEA has a unique organisational. agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a. cross-border exchanges in which relationship between the focal firm and its. License 101 Where lives Entering?. Licensing and Franchising. Franchising makes up 10% of the U. Chapter 16 – Licensing, Franchising, and Other Contractual Strategies I. Posted by Rully Mangunsong at 10:16 AM. From a licensor standpoint, there are fewer risks in the selling and service of what is being. licensee: In a licensing relationship, the buyer of the produce, service, brand or technology being licensed. 5 Contract Manufacturing 7. entered China by giving a retail chain in China the authority to use Saks Fifth Avenue name for a flagship department store in Shanghai. Methods for General Eintrittspreis into the Total Marketplace. Key Challenges Faced by the Franchisee is the Decreased Likelihood. 70. export restraint b. Franchising. Franchising, on the other hand, is a business expansion model where a franchisor grants the rights. Licensing is a contractual arrangement where a company grants permission to another party to use its intellectual property or brand. Learn faster with spaced repetition. _Lic_Update (2). Multiple Choice . Verified Answer for the question: [Solved] Which of the following challenges is applicable to the franchisee in a franchising agreement? A) The franchisee must make their own arrangements to acquire initial training and know-how. Licensing is governed by a licensing agreement, which involves a one-time transfer of property or rights for a fee. Licensing involves an agreement in which one company (licensor) grants another company (licensee) the right to use its intellectual property (e. the inherent disadvantages foreign firms experience in home countries. Some companies use direct exporting, in which they sell the product they manufacture in international markets without third-party. Unique aspects of contractual relationships They are governed by a contract that provides the focal firm with moderate level of control over the foreign. ) Bringing ideas for business in other countries to new markets. Product Invention. 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. Licensing, Franchising and other contractual strategies. Licensing, Franchising, and Other Contractual Strategies. Franchising is an arrangement in which the. Unique aspects of contractual relationships. 13 8. Test. Study with Quizlet and memorize flashcards containing terms like Test Your Comprehension, 15-8. Governed by a contract that provides the focal firm with a moderate level of control over the foreign partner. One of the key differences between a franchise and a license is the limitation set out in licensing agreements. ) Finding financing for a new business in other countries. 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. The equity modes category includes joint ventures and wholly. Financing is more costly in other countries. Technically, the contract binding. B. Contractual Entry Modes 3. Question 14. Studying is made a lot easier and more fun with our online flashcards. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. Internal: Strategic. Greenfield Strategy v. Merger and Acquisition ii. Leasing is especially beneficial to _____. Question 14. Organising for the Strategy. Total views 38. 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. 15. Multiple Choice . Licensing of IPRs is at the heart of a franchise contract. Licensing, Franchising and. Find Flashcards. Here are 10 market entry strategies you can use to sell your product internationally: 1. Licensing. Verified Answer for the question: [Solved] When compared to licensing agreements, the relationships established in franchising arrangements are typically volatile and short-term. 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. 16: Licensing, Franchising, and Other Contractual Strategies Flashcards | Quizlet Ch. Terms in this set (19) Contractual entry strategies. Typically, the franchise agreement is for ten years. 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. 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. Provide dynamic, flexible choice. Royalties. Licensing is a contractual arrangement where a company grants permission to another party to use its intellectual property or brand. Cost of Licensing vs. 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. final ch 15 man3600. Foreign. On the other hand, franchise agreements allow the use of trademarks, additional intellectual. . Contractual entry strategies in international business. 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. licensing, don’t forget that they are separate concepts and each of them offers promising prospects. Co-marketing. Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser. Exporting falls within the broad umbrella of market entry strategies that include a range of approaches to build international markets for your business. The contractual arrangements ( CA ) mode of entry is in most cases a stepping stone to international production. firm can pursue individually or in conjunction with other entry strategies 4. import/export, licensing c. The five most common methods include exporting, licensing and franchising, partnering and strategic alliance, acquisition, and Greenfield venture. Click the card to flip 👆. docx from BUS MISC at Florida State University. -the amount of equity required affects the risk,return, and control that it will have in. 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. Coca Cola is an excellent example of licensing. Typically, this licence will cover know-how and other confidential information, trademarks. Licensing gives a company greater control than franchising over the sale of its product in a target market. To sum up, there are various methods that a firm can utilize in its foreign market entry market strategy. A licensing agreement is generally less complicated and easier to finalize than a franchise agreement. . c. It is unusual to see a direct comparison between, say, licensing and joint ventures, or between franchising and subcontracting. governed by a contract that provides the focal firm with moderate level of control over the foreign partner 2. thecashchicken. they typically include the exchange of intangibles and services 3. a. Correct Answer: Access For Free . Joint R&D iv. First, mature products in a domestic market might find new growth opportunities overseas. Switzerland is a country that has revaluated its currency—this does not happen often. Change Product. Contracts. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. Patents provide inventors the right to prevent another person or company from selling or using an invention for up. firm. 15 Licensing, Franchising and Other Contractual Strategies. 4. 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. 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 license has much stricter restrictions than the franchise. 1. Learn the differences between licensing and franchising and why licensing is not an optional to franchising. 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. b. 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. 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. The problems facing franchise companies in international transactions are relatively less formidable than those facing other service sectors. 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. and industry experts about instructions to franchise your business. Learn the distinguishing between licensing and franchising and why licensing is not certain alternative on franchising. d. Flashcards. Log in Join. world markets • Starbucks has used direct ownership, licensing, and franchising for shops and products In 2008, Starbucks had 12,000 cafes in 35 countries and sales of $10. licensing, Strategic alliancesA detailed list of issues pertaining to termination and renewal terms The advantages and disadvantages of franchising are similar to those of licensing. e. com Licensing • A company (licensor) grants rights to intangible property to another company (licensee). 15. Business model: The first difference is in the business model. ( True/False ) Question 1Start studying Ch 16: Licensing, Franchising, and other Contractual Strategies. • Understand infringement of intellectual property Foundation Concepts • Contractual entry strategies in international business: Cross-border exchanges in which the relationship between the focal firm and its foreign partner is governed by an explicit contract. View Chapter 16. Microfranchises: Franchises operated by one or two people. Flashcards. BUS MISC. 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. Licensing, Franchising and Other Contractual Entry Strategies - Chapter 15. make it easy for later entrants to win business. Direct exporting allows consumers or businesses in new markets to easily buy your products wholesale, where you handle the shipping. Terms in this set (21) Contractual entry strategies in international business. wholly owned subsidiaries. 15. Several strategies for franchising in East. D. The difference between a franchise contract and a licensing contract is that a. 1 Advantages and Disadvantages of Di erent Modes of Internationalization. Test. Flashcards. Learn faster. Cooperative strategies refer to any type of agreement between two or more firms, contractual or otherwise, involving mutual forbearance towards one or more (typically not identical) goals by providing capital, knowledge, technology, managerial talent, and/or other valuable assets under the purview of said firms (Anand & Khanna, 2000; Gulati, 1998). Licensing. Ch. 7. Table 7. Describes the appearance or features of a product. Cooperative strategies refer to any type of agreement between two or more firms, contractual or otherwise, involving mutual forbearance towards one or more (typically not identical) goals by providing capital, knowledge, technology, managerial talent, and/or other valuable assets under the purview of said firms (Anand & Khanna, 2000; Gulati,. Created by. 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. docx from INT- 113 at Southern New Hampshire University. Patent licensing is one of the most expensive 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. Unique Aspects of Contractual Relationships. pdf from BUST 08009 at University of Edinburgh. Flashcards. The specific definition of the license. B) They are more susceptible to volatility and risk compared to FDI. they are governed by a contract that provides the focal firm with a moderate level of control over the foreign partner 2. View Test Prep - licensing and franchising from ECONOMICS 12 at Xavier Institute Of Management & Research. These contractual methods can be seen in many forms such as international licensing and franchising.