2. Learn. •Franchising is an advanced form of licensing in which the focal firm, the franchisor,. 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. Franchising. Study with Quizlet. Ch. Docsity. Franchisers must comply with the same local requirements as other businesses, and the franchise agreements must comply with local contract law, antitrust law, and trademark and licensing laws. Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. Solved . Licensing is designed to reduce the risks involved in doing business for everyone involved. d. In franchising, decision rights encompass the assignment of rights for use of system- and outlet-specific assets in contracts. The globalization of franchising took off in the 1990s as a result of push factors (domestic. 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. Can be pursued independently or in conjunction with other entry strategies. doc from ADMN 05 at The Islamic University of Gaza. Licensing, Franchising and other Contractual Strategies Cross-border contractual relationships: give permission to use intellectualWhen the executives in charge of a firm decide to enter a new country, they must decide how best to do it. Strategic Management Chapter 7. Methods for General Eintrittspreis into the Total Marketplace. Licensing, Franchising and other Contractual Strategies. turnkey contracting. 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. Licensing is expensive and it requires process like agreement & It is similar as Franchise Operation. , licensing and franchising) have lower up-front costs than investment modes do. Marketing in the Global Firm 464 17. Exporting. The license has much stricter restrictions than the franchise. B) The franchisor holds much power, including superior bargaining power. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Intellectual property rights and more. While extant research revolves around the level of resource commitment and control in foreign activities, non-traditional. Licensing •A contractual agreement whereby one company (the licensor) makes an asset. 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. Provide dynamic, flexible choice. Flashcards; Learn; Test;Exporting. Because first mover advantage has been shown to result in better performance in emerging markets Marinov and Marinova 1999, Luo and Peng 1998, a firm may chose licensing as an expeditious entry strategy to gain the first mover advantage and create barriers for subsequent entrants. Licensing is a legal process in which one firm pays to use or distribute another firm's resources. The organization that obtains the access is the licensee. Licensing typically involves royalties or. Firms often combine franchising with other entry strategies. Terms in this set (22) contractual entry strategies in international business. 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. Unique aspects of contractual relationships They are governed by a contract that provides the focal firm with moderate level of control over the foreign. They provide dynamic flexible choice View LICENSING from BUSINESS A M0804455 at Ain Shams University. 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. 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. Question 74. S. Equity-based arrangements. Learn vocabulary, terms, and more with flashcards, games, and other study tools. contract manufacturing. 2. A licensing is an agreement whereby a licensor grants the rights to intangible property (patents, inventions, formulas, processes, designs, copyrights, and trademarks) to another entity (licensee) for a specified period and in return, the licensor receives a royalty/fee from the licensee. is defined as a contractual arrangement whereby one company makes a legally protected asset available to another company in exchange for some form of compensation. 15 Licensing, Franchising and Other Contractual Strategies. Study Licensing, franchising and other contractual strategies (Key Terms) flashcards from Lewis Mellor's class online, or in Brainscape's iPhone or Android app. Licensing, Franchising and other contractual strategies. A number of foreign market entry modes exist, including: exporting, licensing, franchising, joint venture and wholly owned subsidiary. Trademark LicensingCompanies which want to establish a retail presence in an overseas market with minimal risk, the licensing and franchising strategy allows another person or business assume the risk on behalf of the company. A franchise agreement is a contract between the business owner (franchisor) and the franchisee. BUS 325 Ch. Test. B) They are more susceptible to volatility and risk compared to FDI. Turnkey projects 3. Verified Answer for the question: [Solved] Which of the following is an advantage of franchising to the franchisee? A) reduced expenses as the franchisor provides supplies, equipment, and products B) Minimum initial investments or royalty payments are applicable. Licensing. View Test Prep - licensing and franchising from ECONOMICS 12 at Xavier Institute Of Management & Research. 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. ( Multiple Choice) Question 2. Terms in this set (7)Study with Quizlet and memorize flashcards containing terms like when it comes to getting involved in international business what are the three strategies that require the least amount of commitment and effort?, export assistance centers provide hands-on expiring assistance and trade-finance support for ____ and _____ -sized businesses. 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. 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. cross border interaction between focal firm and foreign firm governed by a contract. The Five Common International-Expansion Entry Modes. Test. arrangement in which the focal firm or a consortium of firms plans, finance, organizes, manages. Verified Answer for the question: [Solved] In a licensing agreement, ________ is responsible for local sales. Exporting involves marketing the products you produce in the countries in which you intend to sell them. 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. Licensing. Study with Quizlet and memorize flashcards containing terms like Inbound licenses, Outbound licensing, Contractual entry strategies in international business and more. 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. View Chapter 16 & 17 MAN 3600 from MAN 3600 at Florida State University. Flashcards. Licensing/franchising also opens the doors. 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. 2. Technically, the contract binding. Franchising. . View LICENSING from BUSINESS A M0804455 at Ain Shams University. Global Market Opportunity Assessment IV. A) franchise contract is more specific and usually longer in duration. 15. Licensing, Franchising, and Other. Test. licensing. 1. 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. Flashcards. Homework Help. Match. 8 Target Market Selection. 25 “Market entry options”). ( True/False ) Question 1Start studying Ch 16: Licensing, Franchising, and other Contractual Strategies. a. B) An Indian automobile manufacturing company buys engines from a Japanese manufacturer for its. 16 Licensing, Franchising, and Other Contractual Strategies. 15. Mode Characteristics Advantages Disadvantages. Learn this differs between licensing and franchising and why general is not an alternative for franchising. 15. Bashar Hassan. 11 “Market Entry Options”). Multiple Choice . Often regarded as second best to export or direct investment. if the franchisor has already achieved considerable success in franchising in its domestic market. give later entrants a cost advantage over early entrants. Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser and. 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. A modern approach to international business. 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. Payment is made only after you have completed your 1-on-1 session and are satisfied with your session. Franchising. 4 Understand franchising as an entry strategy. A) joint ventures B) licensing C) 100-percent ownership D) exporting E) franchising, 2) For Walt Disney. 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). Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. Solved . Create flashcards for FREE and quiz yourself with an interactive flipper. Focal firm has moderate level of control over the foreign partner. Learn. Verified Answer for the question: [Solved] _____ is the world's leading licensing firm, with $56. licensing team. When considering a venture in international markets, there are some significant tactical and strategic decisions to be effected. When the parties make licensing or franchising agreement, the parties should critically. C. 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. Direct strategies include joint ventures and wholly-owned subsidiaries/ greenfield investments (see Table 2). 1. Abstract. Exporting. Flashcards. 4 Franchising 7. chapter 16 licensing, franchising, and other contractual contractual entry strategies in international business: exchanges where the relationship between the. 30. to a foreign partner in exchange for a continuous the firm allows another the right to use an specific products, as well as the rights to distribute. chesiebels. Learn faster. E) adaptation for local. In turnkey contracting, one or several firms plan, finance, organize, and. 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. patent. 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. Financing is more costly in other countries. In Licensing agreement and franchise, an overseas-based business will pay you a royalty or commission to use your. Detailed contracts and ongoing monitoring are equally as essential to the success of this international business strategy. These rights are usually protected by a patent or some other intellectual right. An Introduction A. Other Contractual Entry Strategies Chapter 15 Contractual Entry Strategies There are two common types of contractual entry strategies; 1. Product Invention. Devaluation decreases the value of currency in relation to other currencies. Protecting Intellectual Property. They typically include the exchange of intangibles and services. 5Explain the advantages and disadvantages of franchising. 47 I Use contemporary technology to minimize counterfeiting. Multiple Choice . 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. world markets • Starbucks has used direct ownership, licensing, and franchising for shops and products In 2008, Starbucks had 12,000 cafes in 35 countries and sales of $10. management contracts. It reduces risks for both parties. 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. Study with Quizlet and memorize flashcards containing terms like contractual entry strategies in international business, intellectual property, intellectual property rights and more. BUS. 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. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in International Business, Intellectual property, Intellectual Property Rights and more. Licensing vs Franchising The primary difference between a franchisee and a licensee is that franchisees can expect to have a much closer. The licensor provides no technical support or assistance in most cases. Licensing involves an agreement in which one company (licensor) grants another company (licensee) the right to use its intellectual property (e. Each entry mode has different pros and cons, addressing issues like cost, control, speed to market, legal barriers, and cultural barriers with different degrees of efficiency. skhaira2118 Terms in this set (26) contractual entry strategies in IB cross-border exchanges in which the relationship between the focal firm & its foreign partner is. Licensing 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. 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. School Anadolu University; Course Title BUS 1332; Type. Licensing involves granting rights to use intellectual property, while franchising grants rights to use an entire business model. 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. Fast entry, low risk. • Describe. RenaeBoleyn. Ch 16: Licensing, Franchising, and other Contractual Strategies. View Overview. True. Either way, the licensor gets a kickback—as a. What are unique aspect of contractual relationship (5) 1. Table 7. Subway is a company that has spread worldwide through its expansion strategy. Licensing, franchising and other contractual strategies. Learn faster with spaced repetition. Learn faster with spaced repetition. agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a. Either way, the licensor gets a kickback—as a. C) use of a well-known, recognizable brand name D) The franchisee holds much power,. . Many firms build biotech tags,. 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. a. Describes the appearance or features of a product. Product Adaption. 1 Advantages and Disadvantages of Di erent Modes of Internationalization. Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser. 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. contractual agreements. Franchising. Licensing term can be defined as “The method of operating in other country wherein a Firm of one country agrees to permit a company in another country to use the manufacturing, Processing, Trademark & other skill provided by the Licensor”. Learn. 1. Licensing, Franchising, and Other Contractual Strategies 438 Part 5 Functional Area Excellence 464 16. g. Strategy 3: Franchising. 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. CHAPTER 15 LICENSING FRANCHISING AND. Compromises between short-term transactions and long-term solutions. Stage Three: Specify a specific format that is either equity based or contractual (nonequity based). True or false: Transportation costs would have an effect on which entry mode a company uses. The International Franchise Association defines franchising as a "continuing relationship in which the franchisor provides a licensed privilege to do business, plus assistance in organizing training, merchandising and management in return for a consideration from the franchisee ". 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. 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. Country Comparatives Guides. B. Contract manufacturing is when a firm enters into a contract with local manufacturers in foreign countries to get goods produced as per its specifications. Multiple Choice . Licensing,. licensing, don’t forget that they are separate concepts and each of them offers promising prospects. 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) _____. Any licensee can produce and sell products under your name or offer services using your brand. 13 8. Franchising: Arrangement in which the firm allows u000banother the right to use an entire business system in u000bexchange for fees, royalties or. Turnkey contracting. Which of the following is provided by the licensor in a licensing agreement? A) a monetary down-payment plus royalties for all products sold. Voluntary agreements between firms. A) advanced economies B) economies with high PPP C) First World countriesthe statutory protections of franchise laws even if it wants to on advice of legal counsel. 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. Since franchisees will assume many of the responsibilities otherwise shouldered by. 5. Advantages. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. In licensing, the licensor has limited control over the operations of the licensee, whereas franchising involves extensive control and support provided by the franchisor. Footnote 3 We assume that the entering firm E and the domestic incumbent I have identical and constant marginal cost c if firm E uses the FDI strategy. 15. Ch. Licensing and franchising are two international market entry strategies that businesses can use to expand their operations. - advanced form of licensing where firm allows another the right to an entire business system in exchange for fees, royalties, other forms of compensation. View BUS 417 . An arrangement in which the owner of intellectual property grants another firm the right to use that property for a specified period of time in exchange for royalties or other compensation. Licensing typically involves royalties or. foreign direct investment. Build trust, build interpersonal relationships, get to know each other, build an informal network between the 2 firms managers. Exhibit 15. Study with Quizlet and memorize flashcards containing terms like Test Your Comprehension, 15-8. 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. Pages 6. contractor supplies managerial know how. Strategic alliances can take many different forms, such as joint ventures, licensing agreements, and marketing alliances. Market entry modes for international businesses. strategies. The Franchiser maintains significant control of, or provides significant assistance to, the franchisee’s operation methods. 15. Franchising. In this section, we will explore the traditional international-expansion entry modes. From a licensee standpoint, there are fewer risks in product development,. One of the major differences when it comes to franchising vs. Setting up a new wholly owned subsidiary in the host country. firms with industries, markets, and customs in other countries. Expert Help. From a licensor standpoint, there are fewer risks in the selling and service of what is being. 7 Using Demographics to Guide Global Marketing Strategy 6. -most often begun with export. The History of Franchising* I. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in IB, Intellectual Property, Contractual Entry Strategies and more. Two common types of contractual entry strategies are licensing and franchising. Licensing, Franchising and Other Contractual Entry Strategies - Chapter 15. Exporting and Countertrade; 14. Learn faster with spaced repetition. strategic alliances. What are Franchising? Franchising is an business agreement that includes the license is a trademark, of payment of a fee, and control over how the underlying franchises business has operated. 15. An industrial design is intended to ________. International Business: The New Realities, 5e (Cavusgil) Chapter 15 Licensing, Franchising, and Other Contractual Strategies 1) A _____ 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. a. 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. The franchisee is. Learn. Contracts. • 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. Partnering, licensing, franchising, joint venture creation, business acquisition, and Greenfield ventures represent the spectrum of market entry opportunities. 3Describe the advantages and disadvantages of licensing. Governed by : Contract law governs licensing. Another popular way to expand overseas is to sell franchises. Patent. 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. One of the key differences between a franchise and a license is the limitation set out in licensing agreements. 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. For example, Ranbaxy has licensing arrangement in countries like Indonesia and Jordan. Contractual Entry Strategies. A franchised. Question 4. Read other and watch their success stories!. They typically include the exchange of intangibles. The firm that grants such authorization to the other firm is known as the licensor, and the firm in the foreign. Verified Answer for the question: [Solved] The reputation of a licensor will be jeopardized by a licensing agreement if the licensee _____. 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. Global Market Opportunity Assessment 348. Unique aspects of contractual relationships. 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. Foreign. As a rule, licensing strategies inhibit control and produce only moderate returns. B. Leasing is especially beneficial to _____. Meaning. A) duty B). When a firm allows others to use an entire business system in exchange for compensation, the arrangement is known as ________. An industrial design is intended to ________. About Press Copyright Contact us Creators Advertise Developers Terms Privacy Policy & Safety How YouTube works Test new features NFL Sunday Ticket. The five most common methods include exporting, licensing and franchising, partnering and strategic alliance, acquisition, and Greenfield venture. Contractual Entry Modes 3. Franchising is an arrangement in which the. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. Equity relations allow firms to have some direct control, while contractual does not. 6 Understand other contractual entry strategies. Reasons for Licensing:Get Quality Help. BUS MISC. a. in exchange for royalties, license fees, or some other form of compensation Patent Trade secret Brand name Product formulations. provides technical specifications to a subcontractor or local manufacturer. Internal: Strategic. cross-border contractual relationships share several common characteristics. Representatives of the Azoo government are reviewing the project bids. CONTRACTUAL STRATEGIC ALLIANCES i. This strategy is based on franchising, the market entry mode, Subway used in order to enter foreign markets. trading bloc c. External: Operating Enviornment. Can be pursued independently or in conjunction with other entry strategies. A. Foreign Direct Investment and Collaborative Ventures; 15. In deciding which method to adopt, it is important that a firm evaluate each entry mode’s. Provide dynamic, flexible choice. 3. 4. Royalties. The license agreement permits the use of trademarks, nothing more. and popular strategies for business expansion. Unique Aspects of Contractual Relationships.