1. Test. e. Financing is more costly in other countries. Arrangement in which an independent company is licensed to establish, develop, and manage the entire franchising network in its market and has the right to sub franchise to other franchisees, assuming the role of local franchisor. 5. Study with Quizlet and memorize flashcards containing terms like Inbound licenses, Outbound licensing, Contractual entry strategies in international business and more. Created by. 11). 1. Learn faster. , patents, trademarks, copyrights) in exchange for a fee or royalty payment. intellectual property. Similar to a licensing agreement, under a franchising agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a foreign company for a specified period of time and receives a royalty in return. Meaning. ,. 16: Licensing, Franchising, and Other Contractual Strategies Flashcards | Quizlet Ch. Learn. Learn. cross-border exchanges in which the relationship between the focal firm & its foreign partner is governed by an. export restraint b. These options vary in terms of how much. Licensing is governed by a licensing agreement, which involves a one-time transfer of property or rights for a fee. Browse With TopicA licensing agreement is a contract between two parties (the licensor and licensee) in which the licensor grants the licensee the right to use the brand name, trademark, patented technology, or ability to produce and sell goods owned by the licensor. Therefore, a franchise includes a licence. An Introduction A. 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) _____. Key challenges faced by the franchisee is the decreased likelihood of operating an independent business. Post termination issues. 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. The Five Common International-Expansion Entry Modes. BUS MISC. Contractual Entry Strategies of Licensing and Franchising: 1. Licensing is a legal process in which one firm pays to use or distribute another firm's resources. Since franchisees will assume many of the responsibilities otherwise shouldered by. Created by. 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. RenaeBoleyn. Licensing is designed to reduce the risks involved in doing business for everyone involved. Internal: Strategic. Licensing, Franchising, and Other Contractual Strategies Learning Objectives • Explain contractual entry strategies. Licensing concerns a product rights or the method of production marketing the product rights. 1. Flashcards. 1 Advantages and Disadvantages of Di erent Modes of Internationalization. Licensing/franchising also opens the doors. Direct exporting. firm can pursue individually or in conjunction with other entry strategies 4. Franchising is an arrangement in which the. Verified Answer for the question: [Solved] _____ is the world's leading licensing firm, with $56. • 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. 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. " Early market entry is generally considered a competitive. Table 7. 3. marijaazz. 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. 15. View Any. Match. When the executives in charge of a firm decide to enter a new country, they must decide how to enter the country. 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. Subscribe to newsletters Subscribe: $29. d. Match. An industrial design is intended to ________. Exhibit 15. Create flashcards for FREE and quiz yourself with an interactive flipper. Licensing, Franchising and. 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. E) adaptation for local. 1. by Cavusgil, Knight & Riesenberger. When a firm allows others toIn Malaysia, franchising and licensing are governed under different laws. C) The licensee cannot cancel the contract with the. Typically, the franchise agreement is for ten years. Learn. C) licensing contract covers more aspects of operations. contractual agreements. Study with Quizlet and memorize flashcards containing terms like Test Your Comprehension, 15-8. turnkey contracting. 1 International Entry Modes 7. 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. the positive or negative perception of firms and products from a certain country. licensing is the limitation placed on licensing agreements. S. There are five basic options available: (1) exporting, (2) creating a wholly owned subsidiary, (3) franchising, (4) licensing, and (5) creating a joint venture or strategic alliance (Table 7. docx from BUS MISC at Florida State University. Learn. 5 Contract Manufacturing 7. 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. With the export strategy the marginal cost of firm E is higher due to. Question 80. A license is much more limited than a franchise. -flexibility. Franchising. docx from INT- 113 at Southern New Hampshire University. Flashcards. Franchising. Ensuring ongoing competitive advantage. Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser and. Learn. An industrial design is intended to ________. 15. Ask AI New. According to Franchise Business Review, franchising fees typically range from $25,000-$50,000 on average. Licensing is a contractual arrangement where a company grants permission to another party to use its intellectual property or brand. The present model permits any strategy to be compared with any other strategy. A) bribe government officials to reduce nontariff trade barriers B) have a subjective view of moral and ethical standards C) conduct advance research on the host country's laws on intellectual property D) appoint managers from the. True Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser and a franchisee that allows the franchisee to operate a business developed by the franchiser in return for all rights for operations. 5 Explain the advantages and disadvantages of franchising. Establishing joint ventures with a host-country firm 6. Solved . Get Quality Help. 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. dynamic, flexible choices 5. Test. Flashcards. 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. Franchising is governed. Email This BlogThis! Share to Twitter Share to Facebook Share to Pinterest. When considering entering international markets, there are some significant strategic and tactical decisions to be made. A patent exclusively refers to a distinctive design, symbol, logo, word, or series of words placed on a product label. Internal: Strategic. 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. • 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. Flashcards; Learn; Test;Exporting. 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,. 15 ~ Licensing, Franchising, and Other Contractual Strategies. Study Resources. Franchising is governed by an elaborate agreement specifying the responsibilities and duties of both the parties involved. cavusgil ib im 15 - CHAPTER 15 LICENSING FRANCHISING AND OTHER CONTRACTUAL STRATEGIES DETAILED CHAPTER OUTLINE INTRODUCTION The opening vignette is. C) A local firm allows the focal firm to blend into the local market, attracting less. 13 8. in exchange for royalties, license fees, or some other form of compensation Patent Trade secret Brand name Product formulations. 3. Product Adaption. a. Licensing: An arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified period of time in exchange for royalties or other compensation. thecashchicken. Unique Aspects of Contractual Relationships. Ch 16: Licensing, Franchising, and other Contractual Strategies. Question 74. Markman et al. Study Licensing, franchising and other contractual strategies (Key Terms) flashcards from Lewis Mellor's class online, or in Brainscape's iPhone or Android app. Learn the basics of franchising and winning franchise growth strategies. Chapter 16 Licensing, Franchising, and Other Contractual Strategies Learning Objectives: 1. -the different modes can be further classified on the basis of equity or non-equity requirements. Accounting for 12% to 13% of British trade, these methods of earning money abroad have become more popular in recent years. patent. 2Understand licensing as an entry strategy. Advantages:The commercial center does this by familiarizing U. contract manufacturing. Why would a company choose to use a contractual mode of entry rather than an investment mode? Contractual forms of entry (i. The non-equity modes category includes export and contractual agreements. 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. BUS 325 Ch. Joint R&D iv. 2 Understand licensing as an entry strategy. They provide dynamic, flexible choice. Two common types of contractual entry strategies are licensing and franchising. 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. Under an international franchise agreement, a company (the franchiser) grants a foreign company (the franchisee) the right to use its brand name and to sell its products or services. actively manage a foreign. contract manufacturing. embargo, In the context of various strategies for reaching global markets, which of the following strategies. , Licensing. School Anadolu University; Course Title BUS 1332; Type. 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. ) Bringing ideas for business in other countries to new markets. 4 illustrates the nature of the franchising agreement A typical. The country-of-origin effect refers to _____. 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. In some cases, it’s either for five years or can be for 20 years. Exporting, joint ventures, direct investment, franchising, licensing, and various other forms of strategic alliance can be considered as market entry modes. Franchising makes up 10% of the U. agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a. management contracts. Internal: Operational. The nation lacks the skilled labor and technical know-how to handle such large-scale projects. Devaluation decreases the value of currency in relation to other currencies. Exporting falls within the broad umbrella of market entry strategies that include a range of approaches to build international markets for your business. a. Test. 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. -most often begun with export. View final ch 15 man3600. 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. What Are The Types of International Business. This part concerns the sale of knowledge rather than the sale of goods—licensing, franchising, management contracts and other similar arrangements. 5. Multiple Choice . On the other hand, franchise agreements allow the use of trademarks, additional intellectual. C) use of a well-known, recognizable brand name D) The franchisee holds much power,. Chapter 16: Licensing, Franchising and other Contractual Strategies. This strategy is based on franchising, the market entry mode, Subway used in order to enter foreign markets. External: Operating Enviornment. Microfranchises: Franchises operated by one or two people. In 1974 the company started franchising in the USA and later it was uses in order to expand globally. 3 Describe the advantages and disadvantages of licensing. Choose from 29 different sets of Licensing, Franchising and other contractual strategies flashcards on Quizlet. 2. 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. Pages 6. 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. c. 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. LICENSING AND FRANCHISING . . The contractual arrangements ( CA ) mode of entry is in most cases a stepping stone to international production. Protecting Intellectual Property. 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). Change Message. ( Multiple Choice) Question 2. at completion of the contract, the foreign client is handed the "key. The main difference between the two is the duration of the commitment involved. 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. While deciding between franchising vs. B) The franchisor holds much power, including superior bargaining power. When considering a venture in international markets, there are some significant tactical and strategic decisions to be effected. Staffing leverage . The license agreement permits the use of trademarks, nothing more. Ch. Subway is a company that has spread worldwide through its expansion strategy. 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. On the other hand, international licensing is a foreign market entry mode that presents some. It is where a person (franchisor) who has developed a certain way of doing a business gives another. Foreign Direct Investment and Collaborative Ventures; 15. 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. However, they enjoy a lot more freedom than franchisees. Conclusion. ,. c. licensing vs franchising. Chapter 16 - Licensing, Franchising, and Other Contractual Strategies. Franchising is another variation of licensing strategy. On the flip side, potential for revenue growth is more limited because the parent company will only earn a percentage of the earnings from each new store. Patent. if the franchisor has already achieved considerable success in franchising in its domestic market. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. One of the major differences when it comes to franchising vs. Flashcards. Multiple Choice . -risk. 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. Licensing. Introduction. True. The main reasons companies form strategic alliances are to gain access. In Licensing agreement and franchise, an overseas-based business will pay you a royalty or commission to use your. D. 15. Question 1. firm. 15. c. Match. b. View Test Prep - licensing and franchising from ECONOMICS 12 at Xavier Institute Of Management & Research. B) An Indian automobile manufacturing company buys engines from a Japanese manufacturer for its. Licensing and franchising are two international market entry strategies that businesses can use to expand their operations. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. 1. 1Explain contractual entry strategies. 15. View Test Prep - licensing and franchising from ECONOMICS 12 at Xavier Institute Of Management & Research. 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. By signing the franchise contract, a franchisee typically surrenders. In exchange, you get royalties or other payments. International Business: The New Realities, 4e (Cavusgil) Chapter 15 Licensing, Franchising, and Other Contractual Strategies 1) _d. 14). Market entry modes for international businesses. b. The legal claim through which the proprietary assets of firms and individuals are protected from unauthorized use by other parties. 1. Management Service Contracts A management service contract is a long-term agreement, of up to ten years or even longer, whereby the legal owners of the property and real estate enter into a. First, mature products in a domestic market might find new growth opportunities overseas. industry are franchising and management-service contracts (MSC). Flashcards. 2. View Overview. 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. Ch. gives an inventor the right to prevent others from using or selling an invention for a fixed period-typically up to 20 years. Build trust, build interpersonal relationships, get to know each other, build an informal network between the 2 firms managers. strategic alliances. 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 subsidiaryChapter 6: Strategic Alliances. distributing or retailing products that are traditionally manufactured by the franchisor. Licensing involves an agreement in which one company (licensor) grants another company (licensee) the right to use its intellectual property (e. In addition to the standard license process, a company will assist in establishing the business with the design, equipment, organization, and marketing. Firms can pursue them independently or in conjunction with other entry strategies 4. Coca Cola is an excellent example of licensing. Licensing is a contractual agreement whereby, in exchange for a royalty or fee, a company gives the right to another company to use a trademark, know-how, or other proprietary technology. Key Challenges Faced by the Franchisee is the Decreased Likelihood. 3. A) Nickelodeon B) The Walt Disney Company C) Mattel D) Major League Baseball Services Discover Topics Ask a questionVerified Answer for the question: [Solved] To minimize the complexity of franchising, focal firms must ________. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. The agreement so creates a franchise relationship is the franchise agreement and aforementioned parties to a franchise agreement are the franchisor and to french. b. Exporting and foreign direct investing are two common types of contractual entry strategies. 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. - Governed by a CONTRACT that provides the focal firm a moderate level of control over the foreign partner - Typically involve exchange of INTANGIBLES (intellectual property) and services - Can be pursued independently or with other foreign market entry strategies, such as FDI and exporting Licensing and franchising both offer advantages for the involved parties: The licensee and franchisee both gain a competitive advantage in the market. Master Franchise. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in International Business, Intellectual property, Intellectual Property Rights and more. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Licensing and more. International Business Strategy, Management & the New Realities. Indirect strategies are indirect/direct exporting, licensing, franchising and contractual agreements (see Table 2). 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. 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. 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. they typically include the exchange of intangibles and services 3. By entering your email, you agree to receive marketing emails from Shopify. Securities law govern. The book connects to students of the technological age, facing a diverse and evolving economic environment fueled by. B) It ensures payment from the licensee to the licensor upon receipt of an export shipment. arrangement in which the focal firm or a consortium of firms plans, finance, organizes, manages. In this section, we will explore the traditional international-expansion entry modes. The licensor provides no technical support or assistance in most cases. Question 4. In licensing, the licensor has limited control over the operations of the licensee, whereas franchising involves extensive control and support provided by the franchisor. B) They are more susceptible to volatility and risk compared to FDI. Licensing. Cross-border exchanges in which the relationships between the focal firm and its foreign partner is governed by an explicit contract. 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. Created by. 15 Licensing, Franchising and Other Contractual Strategies. licensee: In a licensing relationship, the buyer of the produce, service, brand or technology being licensed. 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. 2. Exporting. *Granting a right to use property to others. Exporting, joint ventures, direct investment, licensing, franchising, and other forms of an alliance is duly considered as market entry types. Market entry modes for international businesses. Study Chapter 16 flashcards. _____ these are the items owned by a franchisee that has the same monetary value. Outline the challenges facing professional service firms when they internationalize. , licensing and franchising) have lower up-front costs than investment modes do. b. (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. 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. and industry leading guides that cover everything from francising principles to vorgeschritten franchise growth strategies. Aspect Franchising Licensing; Definition: Franchising is a business model where a franchisor grants a franchisee the right to operate a business using the franchisor’s brand, systems, and support in exchange for fees and royalties. International Business: The New Realities, 5e, Global Edition (Cavusgil) Chapter 15 Licensing, Franchising, and Other Contractual Strategies. Exporting involves marketing the products you produce in the countries in which you intend to sell them. g. Match. 2. 1 International-Expansion Entry Modes. Franchising is a business model where the franchisor extends business know-how, intellectual rights and the right to operate in the name of a brand for consideration (usually in the form of fees and royalties) to the franchisee. True/False . Another popular way to expand overseas is to sell franchises. ) The many technological barriers to doing business globally. 3 Describe the advantages and disadvantages of licensing. Contract manufacturing iv. Franchising suggests the use of a whole package of signature products and business solutions, whereas licensing allows entrepreneurs to leverage certain individual property and produce and. Entering. Licensing offers more controlBy expanding into new territories and regions via franchising, your company’s services are made available to a wider audience, both diversifying and localizing your reach. 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. 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 4. D)It is typically characterized as an unstable, short-term entry. 15. - advanced form of licensing where firm allows another the right to an entire business system in exchange for fees, royalties, other forms of compensation. 4. docx - Chapter 15: Licensing. Franchising. and popular strategies for business expansion. arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified. C) They attract less attention and less of the criticism sometimes directed at firms. Direct exporting allows consumers or businesses in new markets to easily buy your products wholesale, where you handle the shipping. Brooke MA, PhD, FIEx & Peter J. Global Marketing Strategy for. Build trust, build interpersonal relationships, get to know each other, build an informal network between the 2 firms managers. patent. , licensing and franchising) have lower up-front costs than investment modes do. 3. • Understand licensing as an entry strategy. Contractual entry strategies in international business. WEEK 12 - LICENSING, FRANCHISING AND OTHER CONTRACTUAL STRATEGIES. 8. U. Licensing. 8 Target Market Selection. Match. Terms in this set (22) contractual entry strategies in international business. licensing. The Franchiser requires the franchisee to make a minimum payment of $500 or more, and. Contract manufacturing is when a firm enters into a contract with local manufacturers in foreign countries to get goods produced as per its specifications. D) strategic decision making.