This part concerns the sale of knowledge rather than the sale of goods—licensing, franchising, management contracts and other similar arrangements. 3. A) joint ventures B) licensing C) 100-percent ownership D) exporting E) franchising, 2) For Walt Disney. True. Global Marketing Strategy for. A licensing agreement is generally less complicated and easier to finalize than a franchise agreement. Patent. industry are franchising and management-service contracts (MSC). 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. : Licensing is a contractual agreement in which a licensor grants a licensee the right to use its intellectual property,. 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) _____. export. 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. Franchising VS Licensing. 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. Direct exporting. B) franchise contract must include a foreign government. , Contractual alliances include all of the following except: a. fFranchising as an Entry Strategy. Verified Answer for the question: [Solved] Before undertaking contractual entry strategies abroad, management _____. A franchisor may not enforce a terminable-at-will contract clause in a jurisdiction that requires good cause to terminate a franchise agreement—even if the franchisee’s attorney actively negotiated the contract and the franchisee is given the sameLearn Licensing, Franchising and other contractual strategies with free interactive flashcards. Risk in franchising. Our clients are winning for franchising. When a business enters a foreign market after other foreign firms, the situation is defined as ______ entry. 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,. Franchising. 2. 1. Firms often combine franchising with other entry strategies. University University of. Fresh features from the #1 AI-enhanced learning platform. 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. 2. 11 “Market Entry Options”). 15. • About 70 percent of the more than 2,000 Body Shop stores worldwide are operated by franchisees, while the rest are owned by Body Shop headquarters. e. 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. Exporting involves marketing the products you produce in the countries in which you intend to sell them. 3. 15. View Chapter 16 & 17 MAN 3600 from MAN 3600 at Florida State University. 1Explain contractual entry strategies. Table 7. C) use of a well-known, recognizable brand name D) The franchisee holds much power,. It. Contractual entry strategies in int’l business – cross border exchanges where the. External: Operating Enviornment. Learn. -flexibility. Focal firm has moderate level of control over the foreign partner. The licensor provides no technical support or assistance in most cases. Learn the distinguishing between licensing and franchising and why licensing is not certain alternative on franchising. 8 Target Market Selection. Licensing of IPRs is at the heart of a franchise contract. 1 Licensing. Business model: The first difference is in the business model. A license is much more limited than a franchise. A patent exclusively refers to a distinctive design, symbol, logo, word, or series of words placed on a product label. Licensing, Franchising and. gives an inventor the right to prevent others from using or selling an invention for a fixed period-typically up to 20 years. ,. There are five basic options available: (1) exporting, (2) creating a wholly owned subsidiary, (3) franchising, (4) licensing, and (5) creating a joint venture or strategic alliance (Figure 7. 1 International-Expansion Entry Modes. Flashcards. 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. - As entry strategy, licensing requires neither substantial capital investment nor extensive involvement of licensor in foreign markets. Firms can pursue them independently or in conjunction with other entry strategies. The organization that obtains the access is the licensee. equity mode of entry into foreign markets limited to a contractual agreement. 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. Type of Entry. Flashcards. 4. Contract Manufacturing: - This entry mode is a cross between licensing and investment entry. 1 International Entry Modes 7. Terms: a. 6 Understand other contractual entry strategies. Franchising. 70. and popular strategies for business expansion. 6 Joint Ventures Chapter 8. - includes exchange of intangibles and services. There are five basic options available: (1) exporting, (2) creating a wholly owned subsidiary, (3) franchising, (4) licensing, and (5) creating a joint venture or strategic alliance (Figure 7. B) The franchisor holds much power, including superior bargaining power. Verified Answer for the question: [Solved] The reputation of a licensor will be jeopardized by a licensing agreement if the licensee _____. 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”. Subway is a company that has spread worldwide through its expansion strategy. 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. 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) _____. It's also easier for the company to extricate itself from the situation if the results aren't favorable. a. Other Contractual Entry Strategies Chapter 15 Contractual Entry Strategies There are two common types of contractual entry strategies; 1. contractor supplies managerial know how. However, they enjoy a lot more freedom than franchisees. 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. Unique aspects of contractual relationships. View Homework Help - Week 4 - Subway Case. 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. The principal advantages of international franchising are: (i) Franchising is a beneficial way to. Management Contract 4. Voluntary agreements between firms. Turnkey projects 3. 15. Licensing typically involves royalties or. 1 Explain contractual entry strategies. Either way, the licensor gets a kickback—as a. The article concludes by examining implications of this firm resource model of sustained competitive advantage for other. 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. Learn. 15. Franchising is another variation of licensing strategy. b. Licensing, Franchising, and Other Contractual Strategies. other contractual agreements and equity modes (wholly owned subsidiary or joint venture). 15. Mode Characteristics Advantages Disadvantages. License 101 Where lives Entering?. Read other and watch their success stories!. 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. 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. Business format franchising accounts for most of the explosive growth in franchising that has occurred in the past five decades. Exporting is a method of expansion where. Verified Answer for the question: [Solved] Which of the following is an advantage of franchising to the franchisee? A) reduced expenses as the franchisor provides supplies, equipment, and products B) Minimum initial investments or royalty payments are applicable. Licensing is a legal process in which one firm pays to use or distribute another firm's resources. 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. C) There is no scope to operate an independent. 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). •Franchising is an advanced form of licensing in which the focal firm, the franchisor,. 16: Licensing, Franchising, and Other Contractual Strategies unique aspects of. Franchising is governed. c. View chapter 15. 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. Study Licensing, franchising and other contractual strategies (Key Terms) flashcards from Lewis Mellor's class online, or in Brainscape's iPhone or Android app. Verified Answer for the question: [Solved] _____ is the world's leading licensing firm, with $56. First, mature products in a domestic market might find new growth opportunities overseas. Unique Aspects of Contractual Relationships. arrangement in which the focal firm or a consortium of firms plans, finance, organizes, manages. For courses in international business. Study with Quizlet and memorize flashcards containing terms like Test Your Comprehension, 15-8. 1 Explain contractual entry strategies. Studying is made a lot easier and more fun with our online flashcards. _Lic_Update (2). International Business: The New Realities, 5th Edition caters to a post-millennial student audience, the most diverse and educated generation to date. Global Market Opportunity Assessment • Estimating Demand in Emerging Markets • Global Macro Trends that Affect International Business Licensing, Franchising, and Other Contractual Strategies: Contractual Entry Strategies Licensing as an entry strategy advantages and disadvantages of licensing Franchising as an entry strategy Other. Production of certain components like automobile components to be used for producing. cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit. Chapter 15: Licensing, Franchising, and Other Contractual Strategies. These rights are usually protected by a patent or some other intellectual right. agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a. Governed by a contract that provides the focal firm with a moderate level of control over the foreign partner. 1. Click the card to flip 👆. import/export, licensing c. licensing team. real business leading guides that top everything from franchises basics to advanced vote growth strategies. Under a franchise agreement, a company grants a foreign company the right to use its brand name and sell its products. Your matched tutor provides personalized help according to your question details. Start studying Ch. 8 billion. One of the key differences between a franchise and a license is the limitation set out in licensing agreements. Franchising: Arrangement in which the firm allows u000banother the right to use an entire business system in u000bexchange for fees, royalties or. 3. Licensing specifies the territory as well as period. Exporting, joint ventures, direct investment, franchising, licensing, and various other forms of strategic alliance. - Governed by a CONTRACT that provides the focal firm a moderate level of control over the foreign partner - Typically involve exchange of INTANGIBLES (intellectual property) and services - Can be pursued independently or with other foreign market entry strategies, such as FDI and exporting Licensing and franchising both offer advantages for the involved parties: The licensee and franchisee both gain a competitive advantage in the market. Flashcards. They typically include the exchange of intangibles. Brand owners lease their patents, software, or characters to other companies. Type of Entry. 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 organization that gives the access is the licensor. Ch. 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. ability to preempt rivals and capture demand by establishing a strong brand name. thecashchicken. Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser. , T/F Organizations as diverse as Disney, Caterpillar,. B) franchising. 4 Franchising 7. 2. The license has much stricter restrictions than the franchise. Franchising. Licensing and Franchising. A licensing agreement allows a foreign company to sell a company’s. c. Exporting, joint ventures, direct investment, franchising, licensing, and various other forms of strategic alliance can be considered as market entry modes. Franchising is an example of a contractual vertical marketing system. Match. Question 1. In exchange, you get royalties or other payments. D)It is typically characterized as an unstable, short-term entry. An industrial design is intended to ________. Foreign Direct Investment and Collaborative Ventures 408 15. Learn. Learn. 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. docx from BUS MISC at Florida State University. 4 ways to enter foreign markets. 2. 3. One of the key differences between a franchise and a license is the limitation set out in licensing agreements. Licensing is an arrangement by which the owner of intellectual property grants another. 4 Understand franchising as an entry strategy. Revenues are usually more modest than with other entry strategies. Multiple Choice . pdf from BUST 08009 at University of Edinburgh. They often. Licensing: An arrangement in which the owner of intellectual property. In franchise, a franchiser sells a property to the franchisee but controls over the procedures of the business. Licensing is a type of market entry whereby a company in one country transfers the right of a company in another country to use its unique production processes, patents, trademarks, technological achievements, and other valuable skills for a fee that is established under the contract. Expert Help. . Many firms build biotech tags,. ,. Quizlet flashcards, activities and games help you improve your grades. Contract usually runs five to seven years and is renewable at option of parties. Stage Three: Specify a specific format that is either equity based or contractual (nonequity based). Disney originally forecast shelling out a little more than $30 billion on content (including sports rights) in fiscal 2023, which ended Sept. by Cavusgil, Knight & Riesenberger. In addition to the standard license process, a company will assist in establishing the business with the design, equipment, organization, and marketing. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in IB, Licensing def, Licensing pro and more. Cost of Licensing vs. 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. The five most common methods include exporting, licensing and franchising, partnering and strategic alliance, acquisition, and Greenfield venture. Franchising: more complex form of licensing in which the franchisor allows a franchisee the right to use its entire business system in exchange for compensation. Patents provide inventors the right to prevent another person or company from selling or using an invention for up. Studying is made a lot easier and more fun with our online flashcards. Leasing is Especially Beneficial to _____ Question 80. 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. docx from BUS 417 at Zayed University. Typically include the exchange of intangibles and services. Exporting 2. Test. 4 Understand franchising as an entry strategy. Solved . Create flashcards for FREE and quiz yourself with an interactive flipper. Many Indian firms can use licensing or franchising of the overseas market, particularly the developing countries. late. the firm enters a foreign market before other foreign firms - this is a proactive strategy. They provide dynamic flexible choice View LICENSING from BUSINESS A M0804455 at Ain Shams University. Exporting. Provide dynamic, flexible choice. Contractual Entry Strategies. Licensing. D) franchise contract involves less control and. _____ these are the items owned by a franchisee that has the same monetary value. Some companies use direct exporting, in which they sell the product they manufacture in international markets without third-party. the inherent disadvantages foreign firms experience in home countries. - Firms that use licensing often can avoid expensive entry as is usually required in FDI. 3 Describe the advantages and disadvantages of licensing. Firstly, licensors can generate additional revenue streams by granting licenses to third parties, enabling them to enter new markets or expand their product offerings without significant investment. In deciding which method to adopt, it is important that a firm evaluate each entry mode’s. When a firm allows others toIn Malaysia, franchising and licensing are governed under different laws. Match. A number of foreign market entry modes exist, including: exporting, licensing, franchising, joint venture and wholly owned subsidiary. 15 Licensing, Franchising, and Other Contractual. Learn the differences between licensing and franchising and why licensing is not an optional to franchising. actively manage a foreign. 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. export restraint b. My. Franchising is an advanced form of licensing in which the the franchisor allows the franchisee, the right to use an entire business system in exchange for compensation. chesiebels. 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. Licensing vs Franchising The primary difference between a franchisee and a licensee is that franchisees can expect to have a much closer. 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. Indirect strategies are indirect/direct exporting, licensing, franchising and contractual agreements (see Table 2). 13 8. nontariff barrier d. B. trading bloc c. 1. Licensing, Franchising, and Other Contractual Strategies Learning Objectives • Explain contractual entry strategies. 5. A licensing agreement is generally less complicated and easier to finalize than a franchise agreement. View LICENSING from BUSINESS A M0804455 at Ain Shams University. d. A license is much more limited than a. 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. Question 4. Licensing as an Entry Strategy a. d. Licensing. if the franchisor has already achieved considerable success in franchising in its domestic market. Patent licensing is one of the most expensive licensing. • Contractual entry strategies (franchising, licensing, management. • 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. 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. -most often begun with export. 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 iii. A) the licensee B) patent. But, the organization has little control over technology and marketing. with direct or area franchise forms of licensing (P2a). 1. The impact of strategy considerations can most easily be illustrated in a Cournot duopoly setting as displayed in Fig. When the executives in charge of a firm decide to enter a new country, they must decide how to enter the country. Terms in this set (19) Contractual entry strategies. Protecting Intellectual Property. True/False . ( True/False ) Question 1Start studying Ch 16: Licensing, Franchising, and other Contractual Strategies. Licensees can re-sell the IP at a higher price or manufacture merchandise with the IP on it. a. 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. For international trade, Foreign market entry modes are the ways in which a company can expand its services into a non-domestic market. In addition to paying an. C. licensee: In a licensing relationship, the buyer of the produce, service, brand or technology being licensed. E) adaptation for local. When the parties make licensing or franchising agreement, the parties should critically. IB Final review 80% A- / 90% A Chapter 16 Licensing, Franchising, and Other Contractual Strategies o Intellectual Property (IP): refers to ideas or works created by individuals or firms, including discoveries and inventions; artistic, musical, and literary works, and words, phrases, symbols, and designs Creation from the mind Licensing licenses. chapter 16 licensing, franchising, and other contractual contractual entry strategies in international business: exchanges where the relationship between the. Arrangement in which the firm allows another the right to use an entire business system in exchange for fees, royalties, or. Master Franchise. , licensing and franchising) have lower up-front costs than investment modes do. Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. Foreign. Exporting is a low-risk strategy that businesses find attractive for several reasons. Equity relations allow firms to have some direct control, while contractual does not. Correct Answer: Access For Free . Find Flashcards. (2004) differ between ownership-bas ed entry modes (OBEs) and contract based modes (CBMs). By entering your email, you agree to receive marketing emails from Shopify. Accounting for 12% to 13% of British trade, these methods of earning money abroad have become more popular in recent years. 16 Licensing, Franchising, and Other Contractual Strategies. The country-of-origin effect refers to _____. B) They are more susceptible to volatility and risk compared to FDI. economic output and, depending on your needs, goals and circumstances, may be the right choice for you. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. b. B) It ensures payment from the licensee to the licensor upon receipt of an export shipment. turnkey contracting. 2Understand licensing as an entry strategy. Test. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. Licensing, Franchising, and Other Contractual Strategies 438 Part 5 Functional Area Excellence 464 16. Outline the challenges facing professional service firms when they internationalize. 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. Contractual entry strategies in international business. The firm that grants such authorization to the other firm is known as the licensor, and the firm in the foreign. 15. firms with industries, markets, and customs in other countries. Moderate-Control Strategies (Licensing, Franchising and other Contractual Strategies, Project Based (non-equity) collaborative ventures) "Moderate": -control available to the focal firm over foreign operations. Licensing gives a company greater control than franchising over the sale of its product in a target market. Multiple Choice . Licensing is designed to reduce the risks involved in doing business for everyone involved. Chapter 15: Licensing, Franchising, and Other Contractual Strategies Key Elements Contractual Entry strategies in. . S. 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 vs franchising. Chapter 16: Licensing, Franchising and other Contractual Strategies. licensing is the limitation placed on licensing agreements.