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. Stage Three: Specify a specific format that is either equity based or contractual (nonequity based). The five most common methods include exporting, licensing and franchising, partnering and strategic alliance, acquisition, and Greenfield venture. When the executives in charge of a firm decide to enter a new country, they must decide how to enter the country. 4 ways to enter foreign markets. 2. Licensing is a contractual arrangement where a company grants permission to another party to use its intellectual property or brand. Geb 3375 Introduction to International Business – Study Guide Exam 3_ Part1 1 Introduction to International Business Study Guide Exam 3 – Part 1 Chapter 16: Licensing, Franchising and other Contractual Strategies With this chapter we continued the “entry strategies” part we had interrupted for exam 2. a. View BUS 417 . 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. Switzerland is a country that has revaluated its currency—this does not happen often. 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. True/False . 2. About Press Copyright Contact us Creators Advertise Developers Terms Privacy Policy & Safety How YouTube works Test new features NFL Sunday Ticket. Default and termination 3. Total views 38. In addition to the standard license process, a company will assist in establishing the business with the design, equipment, organization, and marketing. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. 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. The most use contractual entry modes are Licensing, Franchising and Turnkey projects which is going to be explained below. Brand licensing is the act of giving permission to another company to use your business’s intellectual property (IP). C) licensing contract covers more aspects of operations. A licensing agreement is generally less complicated and easier to finalize than a franchise agreement. • Franchising vs licensing – Licensing of IPRs is an element of franchising – Licensing of IPRs is the means to reach the end • Goals of franchising – For the franchisor: geographically expand its busi ness without taking financial risks – For the franchisee: benefit from the brand, experi ence and know-how of the franchisor FranchisingSTRATEGY AND OPPORTUNITY ASSESSMENT FOR INTERNATIONAL BUSINESS; 11. Cavusgil, 3edition, Licensing Franchising and Other Contractual Strategies, Licensing, Franchising, Franchise, Chapter16. Indirect strategies are indirect/direct exporting, licensing, franchising and contractual agreements (see Table 2). cross border interaction between focal firm and foreign firm governed by a contract. CONTRACTUAL STRATEGIC ALLIANCES i. make it easy for later entrants to win business. Licensing typically involves royalties or. Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. On the other hand, international licensing is a foreign market entry mode that presents some. Verified Answer for the question: [Solved] Which of the following is an example of licensing? A) An American electronics firm has given the right to a new process for manufacturing e-book readers to an electronics manufacturer in Canada. Verified Answer for the question: [Solved] In a licensing agreement, ________ is responsible for local sales. Licensing is designed to reduce the risks involved in doing business for everyone involved. ,. 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. 6 Joint Ventures Chapter 8. 15. other contractual agreements and equity modes (wholly owned subsidiary or joint venture). 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. 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. Franchising 5. Its goal. First, mature products in a domestic market might find new growth opportunities overseas. 8. the franchising and licensing as market entry mode in general and in hotel industry. When a firm allows others to use an entire business system in exchange for compensation, the arrangement is known as ________. Log in Join. In addition to paying an. 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. 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". 3. Build trust, build interpersonal relationships, get to know each other, build an informal network between the 2 firms managers. Start studying Ch. 2 Exporting 7. Licensing is a legal process in which one firm pays to use or distribute another firm's resources. accepting a franchise for dealing with the traditional products. 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. Many Indian firms can use licensing or franchising of the overseas market, particularly the developing countries. by Cavusgil, Knight & Riesenberger. Learn faster with spaced repetition. 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. 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. Disadvantages. Licensing, Franchising and Other Contractual Entry Strategies - Chapter 15. 1 International-Expansion Entry Modes. 47 I Use contemporary technology to minimize counterfeiting. Solved . Licensing •A contractual agreement whereby one company (the licensor) makes an asset. Email This BlogThis! Share to Twitter Share to Facebook Share to Pinterest. 2. pdf from ECON 102 at Warsaw School of Economics. Franchising. 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. Joint R&D iv. 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. 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. accepting a business model for doing a business in a traditional manner. 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. Verified Answer for the question: [Solved] The reputation of a licensor will be jeopardized by a licensing agreement if the licensee _____. Risk in franchising. The History of Franchising* I. 11). Although both franchising and MSCs are non-equity modes, there are important differences between. 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. As a disclosure, my company is a franchise providing. Direct exporting. While franchising involves a more comprehensive relationship in which the franchisor provides ongoing support and guidance to the franchisee in addition to granting the right to use its business model and brand. and win! Microsoft Volume. caitlyn_stryker. Lisanslama, Franchising ve diğer Sözleşme Stratejileri Learn with flashcards, games, and more — for free. (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. Abstract. The organization that gives the access is the licensor. Learn. 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. Market entry modes for international businesses. licensing is the limitation placed on licensing agreements. For international trade, Foreign market entry modes are the ways in which a company can expand its services into a non-domestic market. 1 International-Expansion Entry Modes. 1. Microfranchises: Franchises operated by one or two people. contract manufacturing. Dispute settlement 4. Learn. Several companies get patent their technology and other products that they don’t want anyone else to use without their consent. docx from BUS 417 at Zayed University. Human Resource Management. 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. management contracts. -the different modes can be further classified on the basis of equity or non-equity requirements. 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. In exchange, you get royalties or other payments. Either way, the licensor gets a kickback—as a. 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. While extant research revolves around the level of resource commitment and control in foreign activities, non-traditional. Licensing, Franchising and other Contractual Strategies. A Definition of the Franchise Concept In its broadest sense, a “franchise” is a contractual relationship between a “franchisor” and an independent “franchisee” whereby the former licenses the latter to distribute aFranchising: Franchising is a common strategy used by businesses seeking to expand their operations in a risk-conscious manner. Revenues are usually more modest than with other entry strategies. The present model permits any strategy to be compared with any other strategy. 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. On the other hand, franchise agreements allow the use of trademarks, additional intellectual. 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. 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. 15. Test. Contractual Entry Strategies of Licensing and Franchising: 1. 15 Licensing, Franchising and Other Contractual Strategies. Market entry modes for international businesses. In turnkey contracting, one or several firms plan, finance, organize, and. The costs of licensing and franchising vary widely depending on many factors. e. Franchising. My. c. Buckley BA (Econ), MA, Phd Chapter 90 Accesses Abstract This. Multiple Choice . Learn. Options for CONTRACTS include co-marketing, R&D contracts, turnkey project, strategic supplier/distributor, licensing/franchising. Type of Entry. 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. Table 7. A) duty B). Under a franchise agreement, a company grants a foreign company the right to use its brand name and sell its products. C) A local firm allows the focal firm to blend into the local market, attracting less. My Library. 4 Franchising 7. Any licensee can produce and sell products under your name or offer services using your brand. In franchising, decision rights encompass the assignment of rights for use of system- and outlet-specific assets in contracts. Get Quality 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. 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. Your matched tutor provides personalized help according to your question details. master franchise. 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". Multiple Choice . 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. Contractual Entry Modes 3. Test. 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. S. Study with Quizlet and memorize flashcards containing terms like Inbound licenses, Outbound licensing, Contractual entry strategies in international business and more. Flashcards. Doc Preview. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in IB, Licensing def, Licensing pro and more. late. Licensing is governed by a licensing agreement, which involves a one-time transfer of property or rights for a fee. 15 Licensing, Franchising, and Other Contractual. Study with Quizlet. Chapter 16 - Licensing, Franchising and other Contractual Strategies. Licensing & Franchising The major drawback of licensing is the problem of controlling the licensee due to the absence of direct commitment from the international firm granting the licence. Study Chapter 16 flashcards. Licensing, Franchising, and Other Contractual Strategies. Franchising only deals with the provision of a service, while licensing can be for both services and products. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in International Business, Intellectual property, Intellectual Property Rights and more. In this chapter, we address various types of cross-border contractual relationships, including licensing and franchising. CHAPTER 15 LICENSING FRANCHISING AND. C) They attract less attention and less of the criticism sometimes directed at firms. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. Leasing is Especially Beneficial to _____ Question 80. 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. BUS 325 Ch. Firms often combine franchising with other entry strategies. Licensing agreement specifies nature of relationship between licensor and licensee. 4 Understand franchising as an entry strategy. Flashcards. 13 8. Second, some firms find it less risky and more profitable to export. 15 ~ Licensing, Franchising, and Other Contractual Strategies. Post termination issues. International Business: The New Realities, 5e, Global Edition (Cavusgil) Chapter 15 Licensing, Franchising, and Other Contractual Strategies. 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. When considering a venture in international markets, there are some significant tactical and strategic decisions to be effected. A patent exclusively refers to a distinctive design, symbol, logo, word, or series of words placed on a product label. Focal firm has moderate level of control over the foreign partner. , Licensing Agreement, Copyright Licensing and more. Flashcards. import/export, licensing c. Typically include the exchange of intangibles and services. _Lic_Update (2). 6. Licensing, Franchising, and Other Contractual Strategies Learning Objectives • Explain contractual entry strategies. Learn. Strategy and Organization in the International Firm 316 12. Direct strategies include joint ventures and wholly-owned subsidiaries/ greenfield investments (see Table 2). Flashcards. The impact of strategy considerations can most easily be illustrated in a Cournot duopoly setting as displayed in Fig. In this section, we will explore the traditional international-expansion entry modes. Question 2. 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. 2. 6 billion in revenues. Create flashcards for FREE and quiz yourself with an interactive flipper. 5 Contract Manufacturing 7. It can be classified into three major forms-. _____ these are the items owned by a franchisee that has the same monetary value. Fresh features from the #1 AI-enhanced learning platform. Test. d. a. Introduction to International Business Study Guide Exam 3 – Part 1 Chapter 16: Licensing, Franchising and other Contractual Strategies • What does licensing refer to? An arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified period of time in exchange for royalties or other compensation. Franchising. Solved . Franchising. D)It is typically characterized as an unstable, short-term entry. Protecting Intellectual Property. Florida State University. Licensing and franchising share a few similar advantages. 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. 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. chapter 16 licensing, franchising, and other contractual contractual entry strategies in international business: exchanges where the relationship between the. Match. What Are The Types of International Business. 3. A license is “a contractually transferred right to use a legally protected or unprotected in vention in exchange for a fee or another type of compensation” (Mordhorst 1994, p. 5. The firm that grants such authorization to the other firm is known as the licensor, and the firm in the foreign. Can be pursued independently or in conjunction with other entry strategies. trading bloc c. Which mode is to be used in which situation 5. a. 15. : Licensing is a contractual agreement in which a licensor grants a licensee the right to use its intellectual property,. Franchising. 1Explain contractual entry strategies. They are governed by a contract that provides the focal firm a moderate level of control over the foreign partner. Try it free3. Learn. B) They are more susceptible to volatility and risk compared to FDI. The license agreement permits the use of trademarks, nothing more. Master Franchise. - Firms that use licensing often can avoid expensive entry as is usually required in FDI. Licensing Licensing is a contractual transaction where the firm the licensor offers some proprietary assets to foreign company the licensee in exchange for royalty fees (Kotabe and Helsen, 2010: 301). 1 Explain contractual entry strategies. b. Typically include the exchange of intangibles and services. Licensing is giving legal rights to in-market parties to use your company’s name and other intellectual property. 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. 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). Strategy 3: Franchising. Contractual Entry Strategies. proficient interviews, and industry leading guides that cover everything from franchising basics to advanced franchise growth strategies. Study with Quizlet and memorize flashcards containing terms like Inbound licenses, Outbound licensing, Contractual entry strategies in international business and more. 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. Chapter 16: Licensing, Franchising and other Contractual Strategies. embargo, In the context of various strategies for reaching global markets, which of the following strategies. Verified Answer for the question: [Solved] Which of the following is an example of intellectual property? A) systems of measurement B) McDonald's golden arches C) an unpublished book D) a phone directory. Advantages and disadvantages of 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 other compensation. Financing is more costly in other countries. Patents provide inventors the right to prevent another person or company from selling or using an invention for up. Learn. Subscribe to newsletters Subscribe: $29. 14). foreign direct investment. Licensing 2. CONTRACTUAL ENTRY STRATEGIES Two common types of contractual entry strategies are licensing and franchising. Cost of Licensing vs. final ch 15 man3600. Turnkey projects 3. Typically, this licence will cover know-how and other confidential information, trademarks. Try Shopify free for 3 days, no credit card required. 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. While deciding between franchising vs. Change Message. Test. intellectual property. includes exchange of intangibles and services 3. Learn. FDI in particular is now carried out not only by traditional MNEs but also by private investors, hedge funds, SOEs and even sovereign wealth funds. 3. Importing involves purchasing products from other countries and reselling them in one’s own. give later entrants a cost advantage over early entrants. make it difficult for later entrants to win business. Test. 15. Describes the appearance or features of a product. Question 4. Both licensing and franchising are really fantastic. 1. Licensing as an Entry Strategy a. d. These options vary in terms of how much. Zhao et al. Franchising is an example of a contractual vertical marketing system. 1. cross-border contractual relationships share several common characteristics. Match. View LICENSING from BUSINESS A M0804455 at Ain Shams University. Question 1. Firms can pursue them independently or in conjunction with other entry strategies 4. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in IB, Intellectual Property, Contractual Entry Strategies and more. 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. b. C) cross licensing. Equity relations allow firms to have some direct control, while contractual does not. reduce local perceptions of the focal firm as a foreign enterprise Study with Quizlet and memorize flashcards containing terms like 1. Introduction. Ch. Flashcards; Learn; Test;Exporting. Match. • 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. Voluntary agreements between firms. 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. b. Production of certain components like automobile components to be used for producing. Franchisor may impose inappropriate technical or managerial systems on the franchisee. 1. 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. Payment is made only after you have completed your 1-on-1 session and are satisfied with your session. Learn this differs between licensing and franchising and why general is not an alternative for franchising. trademark. Chapter 8: Global Products. Study with Quizlet and memorize flashcards containing terms like contractual entry strategies in international business, intellectual property, intellectual property rights and more. True/False . View MIB_8_MSLewandowska_2018_Fra. -the amount of equity required affects the risk,return, and control that it will have in. WEEK 12 - LICENSING, FRANCHISING AND OTHER CONTRACTUAL STRATEGIES. It's also easier for the company to extricate itself from the situation if the results aren't favorable. The book connects to students of the technological age, facing a diverse and evolving economic environment fueled by. Process. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, intellectual property, intellectual property rights and more. 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. Licensees can re-sell the IP at a higher price or manufacture merchandise with the IP on it. Global Market Opportunity Assessment IV. Low development cost and low risk in overseas expansion are advantages of this entry mode. Franchising is a faster, cheaper form of expansion than adding company-owned stores, because it costs the parent company much less when new stores are owned and operated by a third party. On the most basic level, the difference between a franchise and a license is the amount of support you can expect to receive. 2 Understand licensing as an entry strategy. 1. Exporting is a method of expansion where. 15. Product Adaption. A number of foreign market entry modes exist, including: exporting, licensing, franchising, joint venture and wholly owned subsidiary. Licensing involves an agreement in which one company (licensor) grants another company (licensee) the right to use its intellectual property (e. Quizlet flashcards, activities and games help you improve your grades. focal firm does everything for business and hands it over to customer after training. ( True/False ) Question 1Start studying Ch 16: Licensing, Franchising, and other Contractual Strategies. a. Franchising, on the other hand, is a business expansion model where a franchisor grants the rights. Low control, low local knowledge, potential negative environmental impact of transportation. 16 Licensing, Franchising, and Other Contractual Strategies. These contractual methods can be seen in many forms such as international licensing and franchising. Key Challenges Faced by the Franchisee is the Decreased Likelihood.