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. Chapter 15 Licensing, Franchising, and Other Contractual Strategies 1) _____ is a fee paid periodically to compensate a licensor for the temporary use of its intellectual property, often based on a percentage of gross sales generated from the use of the licensed asset. Florida State University. - includes exchange of intangibles and services. Studying is made a lot easier and more fun with our online flashcards. 4 illustrates the nature of the franchising agreement A typical. reduce local perceptions of the focal firm as a foreign enterprise Study with Quizlet and memorize flashcards containing terms like 1. This part concerns the sale of knowledge rather than the sale of goods—licensing, franchising, management contracts and other similar arrangements. View Chapter 16 & 17 MAN 3600 from MAN 3600 at Florida State University. B) The franchisor holds much power, including superior bargaining power. They generate a consistent, stable level of earnings from foreign operations. Franchising only deals with the provision of a service, while licensing can be for both services and products. 4 Franchising 7. • 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. Foreign Direct Investment and Collaborative Ventures; 15. Less 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. 15. 4. Expert Help. These options vary in terms of how. Solved . True/False . Voluntary agreements between firms. Test. focal firm does everything for business and hands it over to customer after training. Multiple Choice . Subway is a company that has spread worldwide through its expansion strategy. There are two major types of market entry modes: equity and non-equity. Exporting. C. Exporting, joint ventures, direct investment, licensing, franchising, and other forms of an alliance is duly considered as market entry types. Royalties. Try it free3. 2. The license agreement permits the use of trademarks, nothing more. 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, 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. Which of the following is key to licensing strategy success? Avoidance of barriers for foreign companies doing business. 15. An industrial design is intended to ________. 3Describe the advantages and disadvantages of licensing. Direct exporting. 4. A) franchise contract is more specific and usually longer in duration. Learn vocabulary, terms, and more with flashcards, games, and other study tools. View chapter 15. -the amount of equity required affects the risk,return, and control that it will have in. The Franchiser requires the franchisee to make a minimum payment of $500 or more, and. Governed by a contract that provides the focal firm with a moderate level of control over the foreign partner. - advanced form of licensing where firm allows another the right to an entire business system in exchange for fees, royalties, other forms of compensation. True/False . Franchising, on the other hand, is a business expansion model where a franchisor grants the rights. Equity-based arrangements. 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 Understand licensing as an entry strategy. 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. by Cavusgil, Knight & Riesenberger. Fast entry, low risk. e. Disney originally forecast shelling out a little more than $30 billion on content (including sports rights) in fiscal 2023, which ended Sept. Licensing 2. Licensees can re-sell the IP at a higher price or manufacture merchandise with the IP on it. Either way, the licensor gets a kickback—as a. However, they enjoy a lot more freedom than franchisees. agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a. 1 International-Expansion Entry Modes. . • 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. Global Strategy and Organization; 12. Learn this differs between licensing and franchising and why general is not an alternative for franchising. Study with Quizlet and memorize flashcards containing terms like Strategic alliances involve: a. 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. Two common types of contractual entry strategies are licensing and franchising. The Five Common International-Expansion Entry Modes. Franchising is governed under the Franchise Act 1998 (“the Act”) and is regulated by the Registrar of Franchises (“Registrar”) under the purview of Ministry of Domestic Trade and Consumer Affairs. 25 “Market entry options”). Exporting means sending goods produced in one country to sell them in another country. Indirect strategies are indirect/direct exporting, licensing, franchising and contractual agreements (see Table 2). 25 “Market entry options”). Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in International Business, Intellectual property, Intellectual Property Rights and more. 82. 1 Explain contractual entry strategies. These contractual methods can be seen in many forms such as international licensing and franchising. 3. 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". Type of Entry. 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. 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. Licensing involves granting rights to use intellectual property, while franchising grants rights to use an entire business model. b. licensing vs franchising. Created by. Franchising is governed. In order to prevent a licensor-competitor from gaining unilateral benefit, licensing agreements should provide for: A) contract manufacturing. When a firm allows others to use an entire business system in exchange for compensation, the arrangement is known as ________. 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. nontariff barrier d. 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. Contracts. The contractual arrangements ( CA ) mode of entry is in most cases a stepping stone to international production. 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. International Business Strategy, Management & the New Realities. 30. Can be pursued independently or in conjunction with other entry strategies. 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). 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. The equity modes category includes joint ventures and wholly. . Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in International Business, Intellectual Property, Intellectual Property Rights and more. Key Challenges Faced by the Franchisee is the Decreased Likelihood. docx from BUS MISC at Florida State University. Match. Key challenges faced by the franchisee is the decreased likelihood of operating an independent business. 15. What is Licensing and Franchising? Licensing is a contractual agreement in which one company provides another company in foreign country access to its patents, trade secrets, or technology in exchange for a fee known as a royalty. The difference between a franchise contract and a licensing contract is that a. 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. Contractual entry strategies in international business. When considering entering international markets, there are some significant strategic and tactical decisions to be made. 3 Describe the advantages and disadvantages of licensing. It can be classified into three major forms-. the franchising and licensing as market entry mode in general and in hotel industry. foreign direct investment. Test. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. In this section, we will explore the traditional international-expansion entry modes. 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. arrangement in which the focal firm or a consortium of firms plans, finance, organizes, manages. Franchising is an arrangement in which the. (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. Flashcards. Licensing, Franchising and. The country-of-origin effect refers to _____. 2. Buckley BA (Econ), MA, Phd Chapter 90 Accesses Abstract This. licensing. Licensing, Franchising, and Other Contractual Strategies. Licensing is designed to reduce the risks involved in doing business for everyone involved. Expert Help. Study with Quizlet and memorize flashcards containing terms like Inbound licenses, Outbound licensing, Contractual entry strategies in international business and more. 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. accepting a franchise for dealing with the traditional products. Franchising. _____ these are the items owned by a franchisee that has the same monetary value. marijaazz. Intellectual Property rights – legal claims that protect proprietary assets of firms and indivduals from unauthorized use by other parties III. Solved . Its goal. C) licensing contract covers more aspects of operations. the advantages of franchising as an entry mode to global expansion are similar to the disadvantages of licensing false the least preferred strategy when a company's competitive advantage is based on technology is the wholly owned subsidiaryA franchise (or franchising) is a method of distributing products or services involving a franchisor, who establishes the brand’s trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor's name and system. When the parties make licensing or franchising agreement, the parties should critically. Chapter 15: Licensing, Franchising, and Other Contractual Strategies Key Elements Contractual Entry strategies in Franchising and licensing both offer business opportunities with some of the work already done for you, but that doesn't mean they're exactly the same. Multiple Choice . C) There is no scope to operate an independent. 15. The licensor provides no technical support or assistance in most cases. 3 Describe the advantages and disadvantages of licensing. Internal: Operational. e. 15. 4. Exporting involves marketing the products you produce in the countries in which you intend to sell them. 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, don’t forget that they are separate concepts and each of them offers promising prospects. Franchising. Two common types of contractual entry strategies are licensing and franchising. Advantages. This strategy is based on franchising, the market entry mode, Subway used in order to enter foreign markets. They typically include the exchange of intangibles and services. Merger and Acquisition ii. Contract manufacturing iv. 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. International Business: The New Realities, 4e (Cavusgil) Chapter 15 Licensing, Franchising, and Other Contractual Strategies 1) _d. Cavusgil, 3edition, Licensing Franchising and Other Contractual Strategies, Licensing, Franchising, Franchise, Chapter16. and industry leading guides that cover everything from francising principles to vorgeschritten franchise growth strategies. 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. Licensing and franchising share a few similar advantages. True or false: Transportation costs would have an effect on which entry mode a company uses. format franchising — the licensing of a trademark in conjunction with a prescribed business format and method of operation can be dated to the nineteenth century, but did not develop in earnest until the 1950's. Flashcards. 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. It is unusual to see a direct comparison between, say, licensing and joint ventures, or between franchising and subcontracting. agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a. Table 7. 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. Change Message. a. Chapter 15: Licensing, Franchising, and Other Contractual Strategies Key Elements Contractual Entry strategies in. Payment is made only after you have completed your 1-on-1 session and are satisfied with your session. Flashcards; Learn; Test;Exporting. The organization that gives the access is the licensor. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, intellectual property, intellectual property rights and more. Ch. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in International Business, Intellectual Property, Intellectual Property Rights and more. Table 7. 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. E) adaptation for local. destineeashlee. Typically, this licence will cover know-how and other confidential information, trademarks. Although both franchising and MSCs are non-equity modes, there are important differences between. import/export, licensing c. 2. Question 4. actively manage a foreign. Contractual Entry Strategies Contractual entry strategies Two common types of contractual entry strategies are licensing andLicensing. Licensing. Test. Human Resource Management. 15 ~ Licensing, Franchising, and Other Contractual Strategies. Either way, the licensor gets a kickback—as a. 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. Terms in this set (22) contractual entry strategies in international business. they are governed by a contract that provides the focal firm with a moderate level of control over the foreign partner 2. S. Study Licensing, franchising and other contractual strategies (Key Terms) flashcards from Lewis Mellor's class online, or in Brainscape's iPhone or Android app. 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. Introduction. Under a franchise agreement, a company grants a foreign company the right to use its brand name and sell its products. Multiple Choice . Total views 38. Quizlet flashcards, activities and games help you improve your grades. Create flashcards for FREE and quiz yourself with an interactive flipper. A) A joint venture B) Contract manufacturing C) Licensing D) Exporting E) A Global strategic alliance; Answer: B. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. In 1974 the company started franchising in the USA and later it was uses in order to expand globally. In some cases, it’s either for five years or can be for 20 years. gives an inventor the right to prevent others from using or selling an invention for a fixed period-typically up to 20 years. 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. 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. Flashcards. Partnering, licensing, franchising, joint venture creation, business acquisition, and Greenfield ventures represent the spectrum of market entry opportunities. pdf from ECON 102 at Warsaw School of Economics. Verified Answer for the question: [Solved] In a licensing agreement, ________ is responsible for local sales. It stated the market entry strategies of global hotel industry followed Cruz (1999)’s ‘Management Contract first, franchising latter’ strategy. 70. Licensing: 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 addition to the standard license process, a company will assist in establishing the business with the design, equipment, organization, and marketing. Production of certain components like automobile components to be used for producing. 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. As a disclosure, my company is a franchise providing. 2. 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. A franchise is a business model in which a business owner licenses their business to another individual or organization. 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. 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. Terms in this set (19) Contractual entry strategies. Contractual entry strategies in int’l business – cross border exchanges where the. 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. at completion of the contract, the foreign client is handed the "key. International Business: The New Realities, 5e, Global Edition (Cavusgil) Chapter 15 Licensing, Franchising, and Other Contractual Strategies. Learn. Master Franchise. Licensing: Licensing offers several benefits for both the licensor and the licensee. Market entry modes for international businesses. Franchising VS Licensing. 1 Advantages and Disadvantages of Di erent Modes of Internationalization. 3. Licensing, Franchising and other Contractual Strategies. Ch. The Franchiser maintains significant control of, or provides significant assistance to, the franchisee’s operation methods. Learn. BUS. 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. 2. Some firms view licensing as a supplementary strategy to other entry strategies, such as exporting or FDI. Disadvantages. Uploaded By ebrarpatriot. The main reasons companies form strategic alliances are to gain access. • Understand licensing as an entry strategy. Licensing typically involves royalties or. An Industrial Design is Intended to _____ Question 2. 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. Another popular way to expand overseas is to sell franchises. A franchise agreement is a contract between the business owner (franchisor) and the franchisee. 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. embargo, In the context of various strategies for reaching global markets, which of the following strategies. b. Joint R&D iv. Created by. the inherent disadvantages foreign firms experience in home countries. Firms can pursue them independently or in conjunction with other entry strategies. -most often begun with export. A licensing agreement is generally less complicated and easier to finalize than a franchise agreement. and popular strategies for business expansion. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Intellectual property rights and more. Advantages:The commercial center does this by familiarizing U. 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. Match. 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. 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. Post termination issues. Methods for General Eintrittspreis into the Total Marketplace. • Contractual entry strategies (franchising, licensing, management. 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. Created by. Contract Manufacturing: - This entry mode is a cross between licensing and investment entry. Learn the distinguishing between licensing and franchising and why licensing is not certain alternative on franchising. - contract provides focal firm with moderate level of control over foreign partner. . . governed by a contract that provides the focal firm with moderate level of control over the foreign partner 2. Bashar Hassan. , Exporting and foreign direct investing are two common types of contractual entry strategies. Most Business document from University of British Columbia, 26 pages, BUS 434 Market Entry Licensing, Franchising, and Other Contractual Strategies 1-1 Contractual Relationships • Licensing: An arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified period • Understand other contractual entry strategies. 2 ABSTRACT Presently, companies wanting to engage in international trade have a wide pool of choices to choose from. Chapter 16 - Licensing, Franchising and other Contractual Strategies. Licensing, Franchising, and Other Contractual Strategies Learning Objectives • Explain contractual entry strategies. Match. governed by a contract that provides the focal firm with moderate level of control over the foreign partner 2. Chapter 16 - Licensing, Franchising, and Other Contractual Strategies. c. Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser. 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). Licensing is governed by a licensing agreement, which involves a one-time transfer of property or rights for a fee. 5. Verified Answer for the question: [Solved] Which of the following is true about franchising as an entry strategy? A)It provides firms with minimum control over foreign operations. entered China by giving a retail chain in China the authority to use Saks Fifth Avenue name for a flagship department store in Shanghai. View Chapter 16. Multiple Choice . In Licensing agreement and franchise, an overseas-based business will pay you a royalty or commission to use your. contractor supplies managerial know how. If you think of a franchisor (the brand) as a. Any licensee can produce and sell products under your name or offer services using your brand. Typically include the exchange of intangibles and services. Unique Aspects of Contractual Relationships. Verified Answer for the question: [Solved] Which of the following is true about cross-border contractual relationship? A) It is a more visible strategy than FDI and draws a lot of criticism from the local market. Question 14. 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. 1. Since franchisees will assume many of the responsibilities otherwise shouldered by. Direct exporters often sell directly to a consumer (B2C), a business (B2B), or a distributor in a foreign country. 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. a. 3. a. Match. Match. The licensor provides no technical support or assistance in most cases. licensing is the limitation placed on licensing agreements. Week 12 Licensing, Franchising, and Other Contractual Strategies 1. Country Comparatives Guides. Flashcards. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, intellectual property, intellectual property rights and more. Disadvantages of licensing. OTHER CONTRACTUAL ENTRY STRATEGIES -Under build-operate-transfer (BOT) arrangements, the firm contracts to build a major facility, such as a power plant, which it operates for a period of years and then transfers to the host-country government or other public entity. contractor supplies managerial know how. Licensing is a contractual arrangement where a company grants permission to another party to use its intellectual property or brand. patent. contract manufacturing. Terms in this set (21) Contractual entry strategies in international business. 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. In licensing/franchising, the organization sells the rights to intellectual property to an entity within a foreign market for a royalty fee. 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. 4 Understand franchising as an entry strategy.