From a licensor standpoint, there are fewer risks in the selling and service of what is being. Chapter 16: Licensing, Franchising and other Contractual Strategies. ) Bringing ideas for business in other countries to new markets. Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser and. - As entry strategy, licensing requires neither substantial capital investment nor extensive involvement of licensor in foreign markets. Study Chapter 16 flashcards. True/False . Franchising VS Licensing. View Chapter 16 & 17 MAN 3600 from MAN 3600 at Florida State University. Disney originally forecast shelling out a little more than $30 billion on content (including sports rights) in fiscal 2023, which ended Sept. 15. 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. 2. Typically, this licence will cover know-how and other confidential information, trademarks. Many firms build biotech tags,. marijaazz. 15. Cross-border exchanges in which the relationships between the focal firm and its foreign partner is governed by an explicit contract. b. From a licensee standpoint, there are fewer risks in product development,. Learn. Question 74. real business leading guides that top everything from franchises basics to advanced vote growth strategies. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Licensing and more. Verified Answer for the question: [Solved] Azoo Government Projects (Scenario) The nation of Azoo needs the assistance of a contractor to construct a new bridge and a subway system. Licensing •A contractual agreement whereby one company (the licensor) makes an asset. 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. But the Mouse’s actual 2023 number. Franchising. [2] defined market entry as "a planned move into a new or adjacent market for the creation and delivery of offerings. Exporting, joint ventures, direct investment, licensing, franchising, and other forms of an alliance is duly considered as market entry types. 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. Low control, low local knowledge, potential negative environmental impact of transportation. Test. Multiple Choice . There are five basic options available: (1) exporting, (2) creating a wholly owned subsidiary, (3) franchising, (4) licensing, and (5) creating a joint venture or strategic alliance (Figure 7. Establishing joint ventures with a host-country firm 6. cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit. Post termination issues. Learn. Your matched tutor provides personalized help according to your question details. 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. Detailed contracts and ongoing monitoring are equally as essential to the success of this international business strategy. Strategic alliances can take many different forms, such as joint ventures, licensing agreements, and marketing alliances. S. Production of certain components like automobile components to be used for producing. The nation lacks the skilled labor and technical know-how to handle such large-scale projects. Foreign. b. C) The licensee cannot cancel the contract with the. 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) _____. Internal: Operational. Describes the appearance or features of a product. Under a franchise agreement, a company grants a foreign company the right to use its brand name and sell its products. Licensing is giving legal rights to in-market parties to use your company’s name and other intellectual property. The licensor provides no technical support or assistance in most cases. 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) 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. 1 International Entry Modes 7. Licensing and franchising are two international market entry strategies that businesses can use to expand their operations. ability to preempt rivals and capture demand by establishing a strong brand name. Match. (2004) differ between ownership-bas ed entry modes (OBEs) and contract based modes (CBMs). Major global. Match. and win! Microsoft Volume. Log in Join. 3. 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. University University of. 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. Process. 99/yearQuiz 15: Licensing, Franchising, and Other Contractual Strategies. Learn faster with spaced repetition. It is unusual to see a direct comparison between, say, licensing and joint ventures, or between franchising and subcontracting. An Industrial Design is Intended to _____ Question 2. Learn. Licensing involves an agreement in which one company (licensor) grants another company (licensee) the right to use its intellectual property (e. trading bloc c. Licensing concerns a product rights or the method of production marketing the product rights. Licensing of IPRs is at the heart of a franchise contract. Licensing: An arrangement in which the owner of intellectual property. By entering your email, you agree to receive marketing emails from Shopify. Typically, the franchise agreement is for ten years. Business format franchising accounts for most of the explosive growth in franchising that has occurred in the past five decades. 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. Two common types of contractual entry strategies are licensing and franchising. Organising for the Strategy. 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. Financing is more costly in other countries. Contract Manufacturing: - This entry mode is a cross between licensing and investment entry. a. Patent. Multiple Choice . 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). Two Types of Contractual Entry Strategies • 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 • Franchising: An arrangement in which the firm allows another the right to use an entire business system. licensing. 1. Test. 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. External: Operating Enviornment. Equity relations allow firms to have some direct control, while contractual does not. What are unique aspect of contractual relationship (5) 1. Arrangement in which the firm allows another the right to use an entire business system in exchange for fees, royalties, or. C) There is no scope to operate an independent. B) They are more susceptible to volatility and risk compared to FDI. Advantages. The non-equity modes category includes export and contractual agreements. With the export strategy the marginal cost of firm E is higher due to. From a licensee standpoint, there are fewer risks in product development, market testing, manufacturing, and distribution. 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. Country Comparatives Guides. 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. Markman et al. Several companies get patent their technology and other products that they don’t want anyone else to use without their consent. 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. Learn from your partner (and apply that knowledge within your organization) Study Chapter 5: Entry into Foreign Markets flashcards. A) joint ventures B) licensing C) 100-percent ownership D) exporting E) franchising, 2) For Walt Disney. B. Question 4. 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. 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. Exporting is a method of expansion where. Ch 16: Licensing, Franchising, and other Contractual Strategies. Governed by : Contract law governs licensing. The difference is that the franchiser provides a bundle of services and products to. External: Operating Enviornment. These contractual methods can be seen in many forms such as international licensing and franchising. However, they enjoy a lot more freedom than franchisees. 30. . Royalties. Exporting involves marketing the products you produce in the countries in which you intend to sell them. Contract manufacturing is when a firm enters into a contract with local manufacturers in foreign countries to get goods produced as per its specifications. Two Types of Contractual Entry Strategies • 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 • Franchising: An arrangement in which the firm allows another the right to use an entire business system in exchange for fees, royalties, or other. Cost of Licensing vs. drive early entrants out of the market. 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. Question 14. Study with Quizlet and memorize flashcards containing terms like 5 Methods for entering the global market place from least risky/return to most risky/return, Exporting, Licensing and Franchising and more. E) adaptation for local. It's also easier for the company to extricate itself from the situation if the results aren't favorable. Contract manufacturing is also called outsourcing. chesiebels. Learn the basics of franchising and winning franchise growth strategies. It is a form of distribution and marketing in which the company gives the other firm the right to do business in their protected way (Bradley 2005:246). 8 Target Market Selection. 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. Staffing leverage . 2. Learn. dynamic, flexible choices 5. International Business: The New Realities, 5th Edition caters to a post-millennial student audience, the most diverse and educated generation to date. S. industry are franchising and management-service contracts (MSC). governed by a contract that provides the focal firm with moderate level of control over the foreign partner 2. 14). Licensing involves granting rights to use intellectual property, while franchising grants rights to use an entire business model. Global Marketing Strategy for. import/export, joint ventures d. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Intellectual property rights and more. When a firm allows others to use an entire business system in exchange for compensation, the arrangement is known as ________. Flashcards. c. Advantages. Verified Answer for the question: [Solved] Which of the following is characteristic of exclusive licensing agreements? A) The licensor is not allowed to interfere with the production or marketing of the licensed asset. 2 ABSTRACT Presently, companies wanting to engage in international trade have a wide pool of choices to choose from. Match. doc from ADMN 05 at The Islamic University of Gaza. Accounting for 12% to 13% of British trade, these methods of earning money abroad have become more popular in recent years. Type of Entry. 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. patent. provides technical specifications to a subcontractor or local manufacturer. Licensing, Franchising, and Other Contractual Strategies. Match. When considering a venture in international markets, there are some significant tactical and strategic decisions to be effected. make it easy for later entrants to win business. Test. Exporting, joint ventures, direct investment, franchising, licensing, and various other forms of strategic alliance. Which of the following is provided by the licensor in a licensing agreement? A) a monetary down-payment plus royalties for all products sold. Test. RenaeBoleyn. destineeashlee. • Understand licensing as an entry strategy. Learn. The organization that obtains the access is the licensee. 15. [afm 333 – chapter 16 li censing, franchising, and o ther contra ctu al stra tegie s] 1 Contr actual entry s tr ateg ies in int ernational business: cr oss-border e x changes wher e the re lationship between t he foc al firm and its f oreign partner is g overn ed by an explicit co ntr act 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 singular activity such as the shared use of a trademark. 2. 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. embargo, In the context of various strategies for reaching global markets, which of the following strategies. Franchising is governed by an elaborate agreement specifying the responsibilities and duties of both the parties involved. Licensing is a legal process in which one firm pays to use or distribute another firm's resources. 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. licensing is the limitation placed on licensing agreements. In franchising, decision rights encompass the assignment of rights for use of system- and outlet-specific assets in contracts. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. Table 7. 1. The license agreement permits the use of trademarks, nothing more. 4. d. Subscribe to newsletters Subscribe: $29. Exporting and Countertrade; 14. Options for CONTRACTS include co-marketing, R&D contracts, turnkey project, strategic supplier/distributor, licensing/franchising. A) duty B). Learn faster. Contractual Entry Modes 3. nontariff barrier d. Compromises between short-term transactions and long-term solutions. C) A local firm allows the focal firm to blend into the local market, attracting less. 15- Licensing, Franchising and other. Licensing,. chapter 16 licensing, franchising, and other contractual contractual entry strategies in international business: exchanges where the relationship between the. • 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. Intellectual Property rights – legal claims that protect proprietary assets of firms and indivduals from unauthorized use by other parties III. On the other hand,. 1. Chapter 15. Learn. Licensing/franchising also opens the doors. Turnkey projects 3. Conclusion. Learn faster with spaced repetition. Two Types of Contractual Relationships. Homework Help. In turnkey contracting, one or several firms plan, finance, organize, and. Methods for General Eintrittspreis into the Total Marketplace. Key challenges faced by the franchisee is the decreased likelihood of operating an independent business. 15 Licensing, Franchising, and Other Contractual. The impact of strategy considerations can most easily be illustrated in a Cournot duopoly setting as displayed in Fig. In licensing, the licensor has limited control over the operations of the licensee, whereas franchising involves extensive control and support provided by the franchisor. Entering. 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. My. Created by. 15. 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. Lisanslama, Franchising ve diğer Sözleşme Stratejileri Learn with flashcards, games, and more — for free. )*Licensing, Franchising, and Other Contractual Strategies 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 compensationLearn this differences between licensing and franchising and why licensing is not a alternative to franchising. A. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Licensing and more. Which mode is to be used in which situation 5. Flashcards. 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. 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. Multiple Choice . - advanced form of licensing where firm allows another the right to an entire business system in exchange for fees, royalties, other forms of compensation. 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. Licensing ii. 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. 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. In 1974 the company started franchising in the USA and later it was uses in order to expand globally. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in International Business, Intellectual property, Intellectual Property Rights and more. On the other hand, franchise agreements allow the use of trademarks, additional intellectual. licensing is the limitation placed on licensing agreements. Disadvantages. Exporting. franchising, wholly owned foreign subsidiaries b. Licensing is a contractual arrangement where a company grants permission to another party to use its intellectual property or brand. cross-border exchanges in which the relationship between the focal firm & its foreign partner is governed by an. Abstract. Study with Quizlet and memorize flashcards containing terms like Licensing, franchising and other contractual strategies are considered _____ control strategies, Contractual Relationships between a focal firm and a foreign partner are, Intellectual Property refers to and more. View Test Prep - licensing and franchising from ECONOMICS 12 at Xavier Institute Of Management & Research. These rights are usually protected by a patent or some other intellectual right. Indirect strategies are indirect/direct exporting, licensing, franchising and contractual agreements (see Table 2). ) Finding financing for a new business in other countries. IBUS CH 15 Licensing, Franchising, and Other Contractual Strategies. 15. 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. A. management contracts. Match. Keep in mind, however, this is strictly the franchise fee and doesn’t include other startup costs to open the. Two Types of Contractual Relationships. 2. 5Explain the advantages and disadvantages of 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”. The contractual arrangements ( CA ) mode of entry is in most cases a stepping stone to international production. Licensing, Franchising, and Other Contractual Strategies. 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. In licensing/franchising, the organization sells the rights to intellectual property to an entity within a foreign market for a royalty fee. 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. -flexibility. 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. A franchise agreement is a contract between the business owner (franchisor) and the franchisee. Create flashcards for FREE and quiz yourself with an interactive flipper. 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. • 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. One could say that franchising is a special type of licensing arrangement inContractual Entry Modes A company can use a variety of contracts such as : licensing, franchising, management contracts, and turnkey projects to market highly specialized assets and skills in markets beyond its nation’s border. Exporting, joint ventures, direct investment, licensing, franchising, and other forms of an alliance is duly considered as market entry types. 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. Flashcards; Learn; Test;Exporting. 2. The difference between a franchise contract and a licensing contract is that a. Exporting means sending goods produced in one country to sell them in another country. One of the key differences between a franchise and a license is the limitation set out in licensing agreements. 25 “Market entry options”). Contractual entry strategies in international business. Product Adaption. import/export, licensing c. D)It is typically characterized as an unstable, short-term entry. Franchising. A patent exclusively refers to a distinctive design, symbol, logo, word, or series of words placed on a product label. Governed by a contract that provides the focal firm with a moderate level of control over the foreign partner. Process. Partnering, licensing, franchising, joint venture creation, business acquisition, and Greenfield ventures represent the spectrum of market entry opportunities. Contractual entry strategies 2. 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. Here are 10 market entry strategies you can use to sell your product internationally: 1. Two Types of Contractual Relationships. Multiple Choice . Question 14. b. B) It ensures payment from the licensee to the licensor upon receipt of an export shipment. It’s crucial to understand the key differences and similarities between these two popular growth strategies. Chapter 15: Licensing, Franchising, and Other Contractual Strategies. Its goal. Start studying Ch. In this section, we will explore the traditional international-expansion entry modes. 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. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. Greenfield Strategy v. Often regarded as second best to export or direct investment. 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. Cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit contract. Franchising VS Licensing. Although both franchising and MSCs are non-equity modes, there are important differences between. Strategy and Organization in the International Firm 316 12. Exporting, joint ventures, direct investment, franchising, licensing, and various other forms of strategic alliance can be considered as market entry modes. Licensing, Franchising, and Other Contractual Strategies Learning Objectives • Explain contractual entry strategies. e. According to Franchise Business Review, franchising fees typically range from $25,000-$50,000 on average. Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. export restraint b. fAdvantages & Disadvantages of. Test. Franchising iii. BUS. Match. licensing, Strategic alliancesA detailed list of issues pertaining to termination and renewal terms The advantages and disadvantages of franchising are similar to those of licensing. Flashcards. Try it free3. 13 8. A licensing agreement is generally less complicated and easier to finalize than a franchise agreement. In franchising, the franchisor licenses the. The most common methods firms join international trade are through contractual entry strategies such as direct exporting, franchising, licensing, management contract, contract manufacturing, buying a company, and joint ventures. c. View chapter 15. Match. 7 Using Demographics to Guide Global Marketing Strategy 6. Voluntary agreements between firms. ( Multiple Choice) Question 2. They typically include the exchange of intangibles. These options vary in terms of how. 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.