Markman et al. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Licensing and franchising. Under a franchise agreement, a company grants a foreign company the right to use its brand name and sell its products. 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 is a contractual arrangement in which the franchisor provides a franchisee the right to use its name and marketing and operational support in exchange for a fee and, typically, a share of the profits. The impact of strategy considerations can most easily be illustrated in a Cournot duopoly setting as displayed in Fig. Mode Characteristics Advantages Disadvantages. c. When the executives in charge of a firm decide to enter a new country, they must decide how to enter the country. Strategy and Organization in the International Firm 316 12. Licensing is a legal process in which one firm pays to use or distribute another firm's resources. The equity modes category includes joint ventures and wholly. Franchise Agreements are the core operating principles that define the relationship between the franchisor and the franchisee. 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. Foreign. Table 7. Marketing in the Global Firm 464 17. Learn. gives an inventor the right to prevent others from using or selling an invention for a fixed period-typically up to 20 years. 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. contractor supplies managerial know how. Question 2. The licensor provides no technical support or assistance in most cases. 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. a. licensee: In a licensing relationship, the buyer of the produce, service, brand or technology being licensed. S. Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. - advanced form of licensing where firm allows another the right to an entire business system in exchange for fees, royalties, other forms of compensation. Licensing •A contractual agreement whereby one company (the licensor) makes an asset. Outline the challenges facing professional service firms when they internationalize. Unique Aspects of Contractual Relationships. Test. What Are The Types of International Business. Solved . 25 “Market entry options”). , T/F Organizations as diverse as Disney, Caterpillar,. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Licensing and more. 1 Explain contractual entry strategies. Test. Introduction. Governed by : Contract law governs licensing. Subscribe to newsletters Subscribe: $29. firm can pursue individually or in conjunction with other entry strategies 4. Here are 10 market entry strategies you can use to sell your product internationally: 1. Study with Quizlet and memorize flashcards containing terms like Build-operate-transfer (BOT), contractual entry strategies in international business, Intellectual Property and more. thecashchicken. 99/year Quiz 15: Licensing, Franchising, and Other Contractual Strategies. In franchising, the franchisor licenses the. Licensing, Franchising, and Other Contractual Strategies 438 Part 5 Functional Area Excellence 464 16. doc from MANAGEMENT BCPC202 at University of Professional Studies,Accra. The license agreement permits the use of trademarks, nothing more. Contractual Entry Strategies. 4 illustrates the nature of the franchising agreement A typical. If you want to have more autonomy in business decisions with the freedom to make your own vision come to life. Franchising. Question 74. Beyond importing, international expansion is achieved through exporting, licensing arrangements, partnering and strategic alliances An international entry mode involving a contractual agreement between two. import/export, licensing c. CHAPTER 15 LICENSING FRANCHISING AND. e. export restraint b. 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. 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. Revenues are usually more modest than with other entry strategies. The legal claim through which the proprietary assets of firms and individuals are protected from unauthorized use by other parties. 15. in exchange for royalties, license fees, or some other form of compensation Patent Trade secret Brand name Product formulations. 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. Ctrl+k Search questions by imageRetail franchising is the method of opening a single store under the umbrella of an established name, branding, trademark, and product line. 1 Explain contractual entry strategies. Licensing specifies the territory as well as period. 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". -the different modes can be further classified on the basis of equity or non-equity requirements. In other words, ownership rights in franchising are seen in the ratio of company-owned to franchisee-owned stores and residual income rights, as traditionally conceptualized in Fig. B) An Indian automobile manufacturing company, buys engines from a Japanese manufacturer for its. Licensing: Licensing offers several benefits for both the licensor and the licensee. Accounting for 12% to 13% of British trade, these methods of earning money abroad have become more popular in recent years. Exporting 2. : Licensing is a contractual agreement in which a licensor grants a licensee the right to use its intellectual property,. 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. Default and termination 3. Arrangement in which the firm allows another the right to use an entire business system in exchange for fees, royalties, or. turnkey contracting. Franchising is another variation of licensing strategy. When a firm allows others to use an entire business system in exchange for compensation, the arrangement is known as ________. When the executives in charge of a firm decide to enter a new country, they must decide how to enter the country. 15. Licensing typically involves royalties or. chapter 16 licensing, franchising, and other contractual contractual entry strategies in international business: exchanges where the relationship between the. Multiple Choice . 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. Flashcards. Contractual entry strategies in international business. docx - Chapter 15: Licensing. Licensing, on the other hand, is a form of private contract between parties and. 4 Franchising 7. However, they enjoy a lot more freedom than franchisees. Licensing and franchising are two international market entry strategies that businesses can use to expand their operations. 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. 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. the positive or negative perception of firms and products from a certain country. Chapter 15: Licensing, Franchising, and Other Contractual Strategies Key Elements Contractual Entry strategies in. 70. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, intellectual property, intellectual property rights and more. Match. 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. View chapter 15. Exporting, joint ventures, direct investment, franchising, licensing, and various other forms of strategic alliance can be considered as market entry modes. Turnkey Project b. 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. RenaeBoleyn. Licensing: An arrangement in which the owner of intellectual property. 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 is a legal process in which one firm pays to use or distribute another firm's resources. The difference is that the franchiser provides a bundle of services and products to. Franchising makes up 10% of the U. Royalties. cross-border contractual relationships share several common characteristics. Question 80. 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. Flashcards. Human Resource Management. 15 ~ Licensing, Franchising, and Other Contractual Strategies. Franchising. 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. A) joint ventures B) licensing C) 100-percent ownership D) exporting E) franchising, 2) For Walt Disney. docx from INT- 113 at Southern New Hampshire University. Contract Manufacturing: - This entry mode is a cross between licensing and investment entry. Test. Match. 1 Advantages and Disadvantages of Di erent Modes of Internationalization. If you want to have more autonomy in business decisions with the freedom to make your own vision. Equity-based arrangements. Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser. Licensing, Franchising, and Other Contractual Strategies. 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. A modern approach to international business. Flashcards. 1. University University of. They provide dynamic, flexible choice. When a firm allows others to use an entire business system in exchange for compensation, the arrangement is known as ________. 82. focal firm does everything for business and hands it over to customer after training. Licensing is a contractual arrangement where a company grants permission to another party to use its intellectual property or brand. Licensing, Franchising, and Other Contractual Arrangements Michael Z. Product Adaption. 3. Learn. 15. If you think of a franchisor (the brand) as a. ( Multiple Choice) Question 2. Patents provide inventors the right to prevent another person or company from selling or using an invention for up. accepting a business model for doing a business in a traditional manner. Multiple Choice . A) franchise contract is more specific and usually longer in duration. 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) _____. 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. Compromises between short-term transactions and long-term solutions. ability to preempt rivals and capture demand by establishing a strong brand name. 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. 1. Another popular way to expand overseas is to sell franchises. As a disclosure, my company is a franchise providing. Exporting involves marketing the products you produce in the countries in which you intend to sell them. U. LICENSING AND FRANCHISING . includes exchange of intangibles and services 3. Brooke MA, PhD, FIEx & Peter J. International Business: Strategy, Management, and the New RealitiesStudy with Quizlet and memorize flashcards containing terms like contractual entry strategies in IBUS, intellectual property, intellectual property rights and more. View Chapter 16 & 17 MAN 3600 from MAN 3600 at Florida State University. 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. a. Licensing involves granting rights to use intellectual property, while franchising grants rights to use an entire business model. B)It is an ownership-based international business activity. Any licensee can produce and sell products under your name or offer services using your brand. While deciding between franchising vs. Market entry modes for international businesses. Franchising: Arrangement in which the firm allows u000banother the right to use an entire business system in u000bexchange for fees, royalties or. Chapter 15: Licensing, Franchising, and Other Contractual Strategies. Flashcards. There are five basic options available: (1) exporting, (2) creating a wholly owned subsidiary, (3) franchising, (4) licensing, and (5) creating a joint venture or strategic alliance (Figure 7. Licensing 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. In the franchising packages trademarks, copyright, patents and other things often are included. (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. B. 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. External: Operating Enviornment. Representatives of the Azoo government are reviewing the project bids. Franchising is an example of a contractual vertical marketing system. wholly owned subsidiaries. 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. Licensing, Franchising and other Contractual Strategies P a g e 1 | 10 P a g e 2 | 10 Executive Summary The report discusses international modes • Compared to licensing, franchising is usually a much more stable, long-term entry strategy. There are two major types of market entry modes: equity and non-equity. Start studying Ch. com Licensing • A company (licensor) grants rights to intangible property to another company (licensee). Business format franchising accounts for most of the explosive growth in franchising that has occurred in the past five decades. 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. The Franchiser maintains significant control of, or provides significant assistance to, the franchisee’s operation methods. 15. Strategy 3: Franchising. True. Establishing joint ventures with a host-country firm 6. They typically include the exchange of intangibles and services. 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) _____. Conclusion. trademark. They are governed by a contract that provides the focal firm a moderate level of control over the foreign partner. As compared to other retailers, it is safe to say that IKEA has a unique organisational. Table 7. actively manage a foreign. First, mature products in a domestic market might find new growth opportunities overseas. b. Uploaded By ebrarpatriot. 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. 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. Either way, the licensor gets a kickback—as a. skhaira2118 Terms in this set (26) contractual entry strategies in IB cross-border exchanges in which the relationship between the focal firm & its foreign partner is. 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. embargo, In the context of various strategies for reaching global markets, which of the following strategies. In this section, we will explore the traditional international-expansion entry modes. A) advanced economies B) economies with high PPP C) First World countriesthe statutory protections of franchise laws even if it wants to on advice of legal counsel. Securities law govern. trading bloc c. arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified. What Are The Types of International Business. 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. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in IB, Intellectual Property, Contractual Entry Strategies and more. Created by. Verified Answer for the question: [Solved] Which of the following is TRUE about cross-border contractual relationships? A) It is a more visible strategy than FDI and draws a lot of criticism from the local market. 15. 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 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”. C) A local firm allows the focal firm to blend into the local market, attracting less. Keep in mind, however, this is strictly the franchise fee and doesn’t include other startup costs to open the. Leasing is especially beneficial to _____. Typically include the exchange of intangibles and services. Chapter 16 - Licensing, Franchising, and Other Contractual Strategies. Devaluation decreases the value of currency in relation to other currencies. A) A joint venture B) Contract manufacturing C) Licensing D) Exporting E) A Global strategic alliance; Answer: B. Intellectual property rights (IPRs) legal claim through which the proprietary assets of firms and individuals are protected from unauthorized use by other parties, monopoly advantage for specified period of time. While extant research revolves around the level of resource commitment and control in foreign activities, non-traditional. They typically include the exchange of intangibles. Firms can pursue them independently or in conjunction with other entry strategies 4. 3 Licensing 7. Test. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, intellectual property, intellectual property rights and more. 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. Exporting, joint ventures, direct investment, licensing, franchising, and other forms of an alliance is duly considered as market entry types. 4. Contractual entry strategies in international business. Franchisor may impose inappropriate technical or managerial systems on the franchisee. Its goal. , licensing and franchising) have lower up-front costs than investment modes do. Study with Quizlet. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Licensing and more. 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. Match. Direct exporting allows consumers or businesses in new markets to easily buy your products wholesale, where you handle the shipping. Therefore, a franchise includes a licence. Post termination issues. Global Strategy and Organization; 12. 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. provides technical specifications to a subcontractor or local manufacturer. B) The franchisor holds much power, including superior bargaining power. Log in Join. Total views 38. Why would a company choose to use a contractual mode of entry rather than an investment mode? Contractual forms of entry (i. 1. Strategic Management Chapter 7. they typically include the exchange of intangibles and services 3. 1 International Entry Modes 7. It reduces risks for both parties. 3. d. Licensing concerns a product rights or the method of production marketing the product rights. C)It restricts a firm's ability to expand more rapidly abroad. 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. Table 7. What are unique aspect of contractual relationship (5) 1. Ch 16: Licensing, Franchising, and other Contractual Strategies. Licensing typically involves royalties or. 2. 4. Licensing is an arrangement in which a company (licensor) sells the right to use intellectual property or produce a company's product to the licensee, for royalty. Expert Help. Study with Quizlet and memorize flashcards containing terms like T/F 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. On the other hand, franchise agreements allow the use of trademarks, additional intellectual. Intellectual property describes. and industry experts about instructions to franchise your business. Quizlet flashcards, activities and games help you improve your grades. , patents, trademarks, copyrights) in exchange for a fee or royalty payment. Your matched tutor provides personalized help according to your question details. 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. , Licensing Agreement, Copyright Licensing and more. Hotel firms typically do not make any equity investment in either of these modes, although some firms may combine non-equity arrangements with equity investments (Dunning, 1988). Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in IB, Licensing def, Licensing pro and more. An industrial design is intended to ________. 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. 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. 3. licensing. Some firms view licensing as a supplementary strategy to other entry strategies, such as exporting or FDI. [2] defined market entry as "a planned move into a new or adjacent market for the creation and delivery of offerings. master franchise. Coca Cola is an excellent example of licensing. Major global. licensing team. It reduces risks for both parties. firms with industries, markets, and customs in other countries. Study with Quizlet and memorize flashcards containing terms like Test Your Comprehension, 15-8. Direct exporting is often considered the default choice for new market entry. , Contractual alliances include all of the following except: a. Key Challenges Faced by the Franchisee is the Decreased Likelihood. The firm that grants such authorization to the other firm is known as the licensor, and the firm in the foreign. Abstract. Leasing is Especially Beneficial to _____ Question 80. My. accepting a franchise for dealing with the traditional products. 1. Franchising. 6 Understand other contractual entry strategies. 2. b. Master Franchise. ) The many technological barriers to doing business globally. Licensing agreement specifies nature of relationship between licensor and licensee. Skip until Main Content. strategies. This part concerns the sale of knowledge rather than the sale of goods—licensing, franchising, management contracts and other similar arrangements. 1. 2. 6 Joint Ventures Chapter 8. docx from BUS 417 at Zayed University. real business leading guides that top everything from franchises basics to advanced vote growth strategies. 2. 15 Licensing, Franchising, and Other Contractual. 4. economic output and, depending on your needs, goals and circumstances, may be the right choice for you. e. In turnkey contracting, one or several firms plan, finance, organize, and. According to Franchise Business Review, franchising fees typically range from $25,000-$50,000 on average. Production of certain components like automobile components to be used for producing. A licensing agreement allows a foreign company to sell a company’s. 1. S. Provide dynamic, flexible choice. 4 Understand franchising as an entry strategy. Contractual Entry Strategies Contractual entry strategies Two common types of contractual entry strategies are licensing andLicensing. AFM 333 – Ch 16 Licensing, Franchising, and Other Contractual Strategies. management contracts. It’s a legally binding document that spells out—in great detail— the integrated touch points of running the business from the franchisor and franchisee point of view. marijaazz. D)It is typically characterized as an unstable, short-term entry. . *Granting a right to use property to others. Solved . Exporting is a method of expansion where. Build trust, build interpersonal relationships, get to know each other, build an informal network between the 2 firms managers. In order to prevent a licensor-competitor from gaining unilateral benefit, licensing agreements should provide for: A) contract manufacturing. cross-border exchanges in which relationship between focal firm and foreign partner is governed by explicit contract. Learn. 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. Study Licensing, franchising and other contractual strategies (Key Terms) flashcards from Lewis Mellor's class online, or in Brainscape's iPhone or Android app. Test. Turnkey projects 3. To sum up, there are various methods that a firm can utilize in its foreign market entry market strategy. pdf from BUST 08009 at University of Edinburgh. Since franchisees will assume many of the responsibilities otherwise shouldered by. After few years, once the know- how is transferred, there is a risk that the foreign firm may begin to act on its own and the international firm may therefore. C) They attract less attention and less of the criticism sometimes directed at firms. Chapter 16: Licensing, Franchising and other Contractual Strategies. 11 “Market Entry Options”). Joint venture iii. 15. Licensing is designed to reduce the risks involved in doing business for everyone involved. It can be classified into three major forms-. 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. includes exchange of intangibles and services 3. Focal firm has moderate level of control over the foreign partner. Ideas or works created by firms or individuals, such asintellectual property grants another firm the right to usethat property for a specified period of time in exchangeView Homework Help - Week 12. 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. 6. Detailed contracts and ongoing monitoring are equally as essential to the success of this international business strategy. Solved . Setting up a new wholly owned subsidiary in the host country. Chapter 14 Licensing, Franchising, and other Contractual Strategies Opening: Harry Potter; The Magic of Licensing386 • Warner Brothers has exclusive licensing rights to the Potter series • Warner allows companies to use Potter realted images on manufactured products in exchange for royalty • Licensing process is self generating o Each new. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Table 7. give later entrants a cost advantage over early entrants. 8 Target Market Selection. 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".