International Business: The New Realities, 5e, Global Edition (Cavusgil) Chapter 15 Licensing, Franchising, and Other Contractual Strategies. 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) 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. 4 Understand franchising as an entry strategy. 4 Understand franchising as an entry strategy. Voluntary agreements between firms. B) The franchisor holds much power, including superior bargaining power. 4. Exporting and Countertrade; 14. Exporting means sending goods produced in one country to sell them in another country. Test. Chapter 16 - Licensing, Franchising, and Other Contractual Strategies. Entering. Patent licensing is one of the most expensive licensing. Typically, the franchise agreement is for ten years. 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. Build trust, build interpersonal relationships, get to know each other, build an informal network between the 2 firms managers. 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 T/F, Exporting and foreign direct investing are two common types of contractual entry. About Press Copyright Contact us Creators Advertise Developers Terms Privacy Policy & Safety How YouTube works Test new features NFL Sunday Ticket Press Copyright. foreign direct investment. governed by a contract that provides the focal firm with moderate level of control over the foreign partner 2. Governed by : Contract law governs licensing. The difference between a franchise contract and a licensing contract is that a. It's also easier for the company to extricate itself from the situation if the results aren't favorable. Study Chapter 16 - Licensing, Franchising and other Contractual Strategies flashcards from Tia-Jane Maggs's class online, or in Brainscape's iPhone or Android app. (2004) differ between ownership-bas ed entry modes (OBEs) and contract based modes (CBMs). Difference between licensing and. 30. Franchising allows franchisors to function effectively with a much leaner organization. International Business: The New Realities, 4e (Cavusgil) Chapter 15 Licensing, Franchising, and Other Contractual Strategies 1) _d. ( True/False ) Question 1Start studying Ch 16: Licensing, Franchising, and other Contractual Strategies. AI Homework Help. View Overview. 2 Franchising as an expansion strategy. Test. licensing. Fresh features from the #1 AI-enhanced learning platform. • 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. 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. Exporting. firm. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. Verified Answer for the question: [Solved] In a licensing agreement, ________ is responsible for local sales. Unique aspects of contractual relationships. Licensing as an Entry Strategy a. From a licensor standpoint, there are fewer risks in the selling and service of what is being. 15. Ch 16: Licensing, Franchising, and other Contractual Strategies. Study with Quizlet and memorize flashcards containing terms like Test Your Comprehension, 15-8. 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. • 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. These contractual methods can be seen in many forms such as international licensing and franchising. Markman et al. Flashcards. *Granting a right to use property to others. nontariff barrier d. In order to prevent a licensor-competitor from gaining unilateral benefit, licensing agreements should provide for: A) contract manufacturing. Franchising VS Licensing. Establishing joint ventures with a host-country firm 6. 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. 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. Franchising. 3. Licensing involves an agreement in which one company (licensor) grants another company (licensee) the right to use its intellectual property (e. : Licensing is a contractual agreement in which a licensor grants a licensee the right to use its intellectual property,. Management Contract 4. 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. e. Doc Preview. A licensing agreement is generally less complicated and easier to finalize than a franchise agreement. Table 7. Log in Join. b. Master Franchise. Several strategies for franchising in East. trademark. import/export, licensing c. Ask AI New. Franchising is governed by an elaborate agreement specifying the responsibilities and duties of both the parties involved. Licensing is designed to reduce the risks involved in doing business for everyone involved. Similar to exporting, licensing is an easy way for a company to enter an international market quickly and without the need for laying out much capital. Flashcards. A franchise agreement is a contract between the business owner (franchisor) and the franchisee. On the other hand, franchise agreements allow the use of trademarks, additional intellectual. d. in exchange for royalties, license fees, or some other form of compensation Patent Trade secret Brand name Product formulations. includes exchange of intangibles and services 3. 1 Explain contractual entry strategies. 15. and win! Microsoft Volume. contractor supplies managerial know how. Global Strategy and Organization; 12. 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. Many Indian firms can use licensing or franchising of the overseas market, particularly the developing countries. Verified Answer for the question: [Solved] The reputation of a licensor will be jeopardized by a licensing agreement if the licensee _____. 2. 2. chapter 16 licensing, franchising, and other contractual contractual entry strategies in international business: exchanges where the relationship between the. University High School High School Regions. Market entry modes for international businesses. In this chapter, you will learn about: Contractual entry strategies Licensing as an entry strategy Advantages and disadvantages of licensing Franchising as an entry strategy. D) franchise contract involves less control and. Chapter 15: Licensing, Franchising, and Other Contractual Strategies. Solved . 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. Study with Quizlet and memorize flashcards containing terms like Contractual Entry Strategies in IB, Intellectual Property, Contractual Entry Strategies and more. embargo, In the context of various strategies for reaching global markets, which of the following 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. 1. Introduction. make it difficult for later entrants to win business. My. When a business enters a foreign market after other foreign firms, the situation is defined as ______ entry. Franchising. docx from BUS 417 at Zayed University. Match. Franchising, on the other hand, is a business expansion model where a franchisor grants the rights. Created by. Second, some firms find it less risky and more profitable to export. When considering a venture in international markets, there are some significant tactical and strategic decisions to be effected. 2. The contractual arrangements ( CA ) mode of entry is in most cases a stepping stone to international production. Terms: a. Key challenges faced by the franchisee is the decreased likelihood of operating an independent business. Chapter 16- Licensing, Franchising, and Other Contractual Strategies Flashcards | Quizlet Chapter 16- Licensing, Franchising, and Other Contractual Strategies 5. An Industrial Design is Intended to _____ Question 2. Uploaded By ebrarpatriot. 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. Match. Chapter 16 - Licensing, Franchising and other Contractual Strategies. 5 Contract Manufacturing 7. Lisanslama, Franchising ve diğer Sözleşme Stratejileri Learn with flashcards, games, and more — for free. Licensees also enjoy lowered risk because they're usually entering the marketplace with a known quantity and a built-in customer base. Learn. provides technical specifications to a subcontractor or local manufacturer. The license agreement permits the use of trademarks, nothing more. The costs of licensing and franchising vary widely depending on many factors. One of the key differences between a franchise and a license is the limitation set out in licensing agreements. 1. Revenues are usually more modest than with other entry strategies. Disadvantages. 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. )*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. C) A local firm allows the focal firm to blend into the local market, attracting less. Learn vocabulary, terms, and more with flashcards, games, and other study tools. marijaazz. Flashcards. agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a. C) use of a well-known, recognizable brand name D) The franchisee holds much power,. 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. The History of Franchising* I. Terms in this set (21) Contractual entry strategies in international business. Get Quality Help. The strategy is to deter other firms’ entry into the market. Stage Three: Specify a specific format that is either equity based or contractual (nonequity based). Quiz 15: Licensing, Franchising, and Other Contractual Strategies. The Franchiser requires the franchisee to make a minimum payment of $500 or more, and. Business format franchising accounts for most of the explosive growth in franchising that has occurred in the past five decades. The firm that grants such authorization to the other firm is known as the licensor, and the firm in the foreign. -resource commitment. 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. Microfranchises: Franchises operated by one or two people. Two common types of contractual entry strategies are licensing and franchising. Read other and watch their success stories!. If you think of a franchisor (the brand) as a. View MIB_8_MSLewandowska_2018_Fra. C) licensing contract covers more aspects of operations. b. Similarly, explicit contracts define franchising relationships. , licensing and franchising) have lower up-front costs than investment modes do. A modern approach to international business. 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. - 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. Financing is more costly in other countries. agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a. D) strategic decision making. Your matched tutor provides personalized help according to your question details. accepting a franchise for dealing with the traditional products. 13 8. 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. For example, Ranbaxy has licensing arrangement in countries like Indonesia and Jordan. Low development cost and low risk in overseas expansion are advantages of this entry mode. When a firm allows others toIn Malaysia, franchising and licensing are governed under different laws. Licensing is giving legal rights to in-market parties to use your company’s name and other intellectual property. Flashcards. focal firm does everything for business and hands it over to customer after training. Correct Answer: Access For Free . Setting up a new wholly owned subsidiary in the host country. Securities law govern. Learn. The specific definition of the license. LICENSING AND FRANCHISING . Firms need to evaluate their options to choose the entry mode that best suits their strategy and goals. Contractual Entry Strategies. This strategy is based on franchising, the market entry mode, Subway used in order to enter foreign markets. Skip until Main Content. Dispute settlement 4. The present model permits any strategy to be compared with any other strategy. 1 Explain contractual entry strategies. 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. 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. Intellectual Property rights – legal claims that protect proprietary assets of firms and indivduals from unauthorized use by other parties III. 1. [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. Franchising is an example of a contractual vertical marketing system. Partnering, licensing, franchising, joint venture creation, business acquisition, and Greenfield ventures represent the spectrum of market entry opportunities. Licensing 2. Abstract. Test. Ask AI New. 15. 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 ". Question 4. 15. Learn the differences between licensing and franchising and why licensing is not an optional to franchising. Brand owners lease their patents, software, or characters to other companies. 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. Special licensing arrangement; Contract between a parent company-franchisor and a franchisee that allows the franchisee to operate a business developed buy the franchisor in return for a fee and adherence to franchise-wide policies; Has great appeal to local entrepreneurs anxious to learn and apply Western-style marketing techniquesStudy with Quizlet and memorize flashcards containing terms like Starbucks' relentless pursuit of global market opportunities illustrates the fact that most firms face a broad range of strategy alternatives. 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). Patent. master franchise. They typically include the exchange of intangibles and services. a. 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. In 1974 the company started franchising in the USA and later it was uses in order to expand globally. Franchising is a variation of licensing strategy in which there is a contract between the parent company franchiser and. 1. The licensor provides no technical support or assistance in most cases. Default and termination 3. Franchising is an advanced form of licensing in which the the franchisor allows the franchisee, the right to use an entire business system in exchange for compensation. Chapter 16: Licensing, Franchising and other Contractual Strategies. 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. 1 Explain contractual entry strategies. 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. licensing, don’t forget that they are separate concepts and each of them offers promising prospects. 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. 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, franchising and other contractual strategies. Match. -the amount of equity required affects the risk,return, and control that it will have in. 15- Licensing, Franchising and other. Advantages. Organising for the Strategy. Match. Marketing in the Global Firm 464 17. The difference is that the franchiser provides a bundle of services and products to. Learn faster. Contractual Entry Modes 3. Verified Answer for the question: [Solved] When compared to licensing agreements, the relationships established in franchising arrangements are typically volatile and short-term. Find Flashcards. Learn. Several companies get patent their technology and other products that they don’t want anyone else to use without their consent. Franchisor may impose inappropriate technical or managerial systems on the franchisee. A license is “a contractually transferred right to use a legally protected or unprotected in vention in exchange for a fee or another type of compensation” (Mordhorst 1994, p. A license is much more limited than a franchise. Patents provide inventors the right to prevent another person or company from selling or using an invention for up. trading bloc c. 1Explain contractual entry strategies. Exporting, joint ventures, direct investment, franchising, licensing, and various other forms of strategic alliance. Reasons for Licensing:Get Quality Help. By entering your email, you agree to receive marketing emails from Shopify. 15. Many firms build biotech tags,. 2. Describes the appearance or features of a product. B) They are more susceptible to volatility and risk compared to FDI. A. Learn. In deciding which method to adopt, it is important that a firm evaluate each entry mode’s. -flexibility. Learn. Brand owners lease their patents, software, or characters to other companies. They are governed by a contract that provides the focal firm a moderate level of control over the foreign partner. Either way, the licensor gets a kickback—as a. the firm enters a foreign market before other foreign firms - this is a proactive strategy. 99/yearQuiz 15: Licensing, Franchising, and Other Contractual Strategies. 2Understand licensing as an entry strategy. 4 Understand franchising as an entry strategy. View chapter 15. Licensing and franchising are two international market entry strategies that businesses can use to expand their operations. Multiple Choice . Contract duration and renewal 2. Franchising. Learn. Protecting Intellectual Property. Learn. B)It is an ownership-based international business activity. Devaluation decreases the value of currency in relation to other currencies. wholly owned subsidiaries. A) A joint venture B) Contract manufacturing C) Licensing D) Exporting E) A Global strategic alliance; Answer: B. Licensing is an agreement between Licensor and licensee wherein one organization gives the other organization access to its patents, trade secrets, or technology for a fee known as a royalty. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, Intellectual property, Licensing and more. 6 Understand other contractual entry strategies. 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. Learn faster with spaced repetition. BUS MISC. 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. But the Mouse’s actual 2023 number. turnkey contracting. doc from ADMN 05 at The Islamic University of Gaza. Find Flashcards. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. Methods for General Eintrittspreis into the Total Marketplace. In licensing, the licensor has limited control over the operations of the licensee, whereas franchising involves extensive control and support provided by the franchisor. 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. 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. Exporting and foreign direct investing are two common types of contractual entry strategies. RenaeBoleyn. All of the above. 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. Franchising; Meaning: This is a contractual agreement in which one firm gets access to another firm’s patent, technology and other things in exchange for money. other contractual agreements and equity modes (wholly owned subsidiary or joint venture). reduce local perceptions of the focal firm as a foreign enterprise Study with Quizlet and memorize flashcards containing terms like 1. 11 “Market Entry Options”). 6. , Contractual alliances include all of the following except: a. 8 Target Market Selection. School Anadolu University; Course Title BUS 1332; Type. turnkey contracting. Although both franchising and MSCs are non-equity modes, there are important differences between. 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. On the other hand, international licensing is a foreign market entry mode that presents some. caitlyn_stryker. Match. Docsity. It described the development of Chinese hotel industry at the end. When a firm allows others to use an entire business system in exchange for compensation, the arrangement is known as ________. 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. Production of certain components like automobile components to be used for producing. It is unusual to see a direct comparison between, say, licensing and joint ventures, or between franchising and subcontracting. Table 7. The article concludes by examining implications of this firm resource model of sustained competitive advantage for other. accepting a business model for doing a business in a traditional manner. ) Finding financing for a new business in other countries. Global Marketing Strategy for. Intellectual property describes. On the other hand, franchise agreements allow the use of trademarks, additional intellectual. Study with Quizlet and memorize flashcards containing terms like Strategic alliances involve: a. 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. 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. These rights are usually protected by a patent or some other intellectual right. 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 Understand licensing as an entry strategy. 15 Licensing, Franchising and Other Contractual Strategies. Mode Characteristics Advantages Disadvantages. Flashcards. 47 I Use contemporary technology to minimize counterfeiting. . 4. The main reasons companies form strategic alliances are to gain access. 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. A licensing agreement is generally less complicated and easier to finalize than a franchise agreement. Beyond importing, international expansion is achieved through exporting, licensing arrangements, partnering and strategic alliances An international entry mode involving a contractual agreement between two. Governed by a contract that provides the focal firm with a moderate level of control over the foreign partner. Process. Greenfield Strategy v. Chapter 15. 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) _____. arrangement in which the focal firm or a consortium of firms plans, finance, organizes, manages. In addition to paying an. Disney originally forecast shelling out a little more than $30 billion on content (including sports rights) in fiscal 2023, which ended Sept. Under a franchise agreement, a company grants a foreign company the right to use its brand name and sell its products. On the other hand, franchising is a business model whereby a company (franchisor) allows another company (franchisee) to use its.