Greenfield Strategy v. Conclusion. 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. Licensing, Franchising and. Ask AI New. Coca Cola is an excellent example of licensing. External: Operating Enviornment. 5 Contract Manufacturing 7. c. Internal: Operational. 2. 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. Create flashcards for FREE and quiz yourself with an interactive flipper. , Licensing is a contractual agreement whereby one company (the licensor) makes a legally protected asset available to another company (the licensee) in. The History of Franchising* I. 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. Franchising is a faster, cheaper form of expansion than adding company-owned stores, because it costs the parent company much less when new stores are owned and operated by a third party. B. 0 (1. A patent exclusively refers to a distinctive design, symbol, logo, word, or series of words placed on a product label. Production of certain components like automobile components to be used for producing. firm. [2] defined market entry as "a planned move into a new or adjacent market for the creation and delivery of offerings. - Firms that use licensing often can avoid expensive entry as is usually required in FDI. reduce local perceptions of the focal firm as a foreign enterprise Study with Quizlet and memorize flashcards containing terms like 1. A franchise agreement is a contract between the business owner (franchisor) and the franchisee. 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. Table 7. 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. Its goal. When a firm allows others to use an entire business system in exchange for compensation, the arrangement is known as ________. 4 Understand franchising as an entry strategy. Mode Characteristics Advantages Disadvantages. My. Study with Quizlet and memorize flashcards containing terms like Strategic alliances involve: a. Licensing A contractual agreement whereby one company (the. View LICENSING from BUSINESS A M0804455 at Ain Shams University. When considering a venture in international markets, there are some significant tactical and strategic decisions to be effected. By signing the franchise contract, a franchisee typically surrenders. Contractual Entry Strategies. This part concerns the sale of knowledge rather than the sale of goods—licensing, franchising, management contracts and other similar arrangements. It's also easier for the company to extricate itself from the situation if the results aren't favorable. B) They are more susceptible to volatility and risk compared to FDI. Licensing/franchising also opens the doors. 2. Market entry modes for international businesses. Firms can pursue them independently or in conjunction with other entry strategies. 15 Licensing, Franchising, and Other Contractual. chesiebels. 7. 2. 6 Understand other contractual entry strategies. 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. Skip until Main Content. Chapter 15: Licensing, Franchising, and Other Contractual Strategies Key Elements Contractual Entry strategies in. : Licensing is a contractual agreement in which a licensor grants a licensee the right to use its intellectual property,. 1 Explain contractual entry strategies. Contract usually runs five to seven years and is renewable at option of parties. Patent licensing is one of the most expensive licensing. B. Type of Entry. 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. About Press Copyright Contact us Creators Advertise Developers Terms Privacy Policy & Safety How YouTube works Test new features NFL Sunday Ticket. , Licensing. Licensing is giving legal rights to in-market parties to use your company’s name and other intellectual property. Setting up a new wholly owned subsidiary in the host country. Test. 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. Includes such knowledge-based assets of the firm or individuals as industrial designs, trade secrets, inventions, works of art, literature, and other "creations of the mind". Payment is made only after you have completed your 1-on-1 session and are satisfied with your session. When it comes to retail entrepreneurship, there are several ways to open a. Florida State University. A. For courses in international business. franchising, wholly owned foreign subsidiaries b. agreement, the multinational firm grants rights on its intangible property, like technology or a brand name, to a. A) franchise contract is more specific and usually longer in duration. Contractual Entry Strategies. Study with Quizlet and memorize flashcards containing terms like contractual entry strategies in international business, intellectual property, intellectual property rights and more. licensing. master franchise. Exporting 2. View MIB_8_MSLewandowska_2018_Fra. It is where a person (franchisor) who has developed a certain way of doing a business gives another. Match. docx from BUS MISC at Florida State University. Flashcards. Low control, low local knowledge, potential negative environmental impact of transportation. 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. Multiple Choice . Flashcards. Protecting Intellectual Property. , T/F Organizations as diverse as Disney, Caterpillar,. On the other hand, franchise agreements allow the use of trademarks, additional intellectual. and industry leading guides that cover everything from francising principles to vorgeschritten franchise growth strategies. b. It's also easier for the company to extricate itself from the situation if the results aren't favorable. Intellectual property rights (IPRs) legal claim through which the proprietary assets of firms and individuals are protected from unauthorized use by other parties, monopoly advantage for specified period of time. Contract manufacturing is also called outsourcing. Both licensing and franchising are really fantastic. Licensing is an arrangement by which the owner of intellectual property grants another. Learn. 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. marijaazz. Flashcards. Study with Quizlet and memorize flashcards containing terms like Contractual entry strategies in international business, intellectual property, intellectual property rights and more. firm can pursue individually or in conjunction with other entry strategies 4. Direct exporting is often considered the default choice for new market entry. True. 15. if the franchisor has already achieved considerable success in franchising in its domestic market. But the Mouse’s actual 2023 number. make it difficult for later entrants to win business. cross-border exchanges where the relationship between the focal firm and its foreign partner is governed by an explicit. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. Exporting and Foreign Direct Investing are Two Common Types of Contractual. Learn vocabulary, terms, and more with flashcards, games, and other study tools. View Test Prep - licensing and franchising from ECONOMICS 12 at Xavier Institute Of Management & Research. Joint R&D iv. Studying is made a lot easier and more fun with our online flashcards. View final ch 15 man3600. Which of the following is key to licensing strategy success? Avoidance of barriers for foreign companies doing business. Low development cost and low risk in overseas expansion are advantages of this entry mode. 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. 1Explain contractual entry strategies. In this chapter, we address various types of cross-border contractual relationships, including licensing and franchising. Compromises between short-term transactions and long-term solutions. Dispute settlement 4. Flashcards. 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. The Franchiser maintains significant control of, or provides significant assistance to, the franchisee’s operation methods. Verified Answer for the question: [Solved] Which of the following is an example of intellectual property? A) systems of measurement B) McDonald's golden arches C) an unpublished book D) a phone directory. 15. Flashcards. University High School High School Regions. Patent licensing is a licensing that a licensor gives to the licensee to grant permission to conduct patent activities. 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. Global Strategy and Organization; 12. 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: 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. Created by. LICENSING AND FRANCHISING . 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. Second, some firms find it less risky and more profitable to export. Contracts. Test. Key challenges faced by the franchisee is the decreased likelihood of operating an independent business. 1 Advantages and Disadvantages of Di erent Modes of Internationalization. Detailed contracts and ongoing monitoring are equally as essential to the success of this international business strategy. (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. 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. dynamic, flexible choices 5. In order to prevent a licensor-competitor from gaining unilateral benefit, licensing agreements should provide for: A) contract manufacturing. Chapter 14 Licensing, Franchising, and other Contractual Strategies Opening: Harry Potter; The Magic of Licensing386 • Warner Brothers has exclusive licensing rights to the Potter series • Warner allows companies to use Potter realted images on manufactured products in exchange for royalty • Licensing process is self generating o Each new. On the other hand, franchising is a business model whereby a company (franchisor) allows another company (franchisee) to use its. Risk in franchising. 11 “Market Entry Options”). On the other hand, franchise agreements allow the use of trademarks, additional intellectual. a. Study Resources. contractor supplies managerial know how. School Anadolu University; Course Title BUS 1332; Type. trading bloc c. B) An Indian automobile manufacturing company buys engines from a Japanese manufacturer for its. 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. Log in Join. If you want to have more autonomy in business decisions with the freedom to make your own vision. Switzerland is a country that has revaluated its currency—this does not happen often. 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. Question 1. An Industrial Design is Intended to _____ Question 2. Leasing is Especially Beneficial to _____ Question 80. pdf from ECON 102 at Warsaw School of Economics. 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 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. 11). 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. wholly owned subsidiaries. Foreign Direct Investment and Collaborative Ventures; 15. Licensing, Franchising, and Other Contractual Strategies Internal: strategic Register IP target country chain1. Question 14. Franchising VS Licensing. About Press Copyright Contact us Creators Advertise Developers Terms Privacy Policy & Safety How YouTube works Test new features NFL Sunday Ticket Press Copyright. View BUS 417 . 1 Explain contractual entry strategies. Franchising is common in manufacturing industries while licensing is primarily used in service industries. governed by a contract that provides the focal firm with moderate level of control over the foreign partner 2. A. 15. View Homework Help - Week 4 - Subway Case. Match. 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. Franchising makes up 10% of the U. . Franchising. 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. Franchising. 4. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. 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. 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. As a disclosure, my company is a franchise providing. They provide dynamic flexible choice View LICENSING from BUSINESS A M0804455 at Ain Shams University. View Chapter 16 & 17 MAN 3600 from MAN 3600 at Florida State University. Build trust, build interpersonal relationships, get to know each other, build an informal network between the 2 firms managers. b. The organization that gives the access is the licensor. Change Message. Learn. 15. 1. View Any. In some cases, it’s either for five years or can be for 20 years. The nation lacks the skilled labor and technical know-how to handle such large-scale projects. Licensing •A contractual agreement whereby one company (the licensor) makes an asset. patent. docx from INT- 113 at Southern New Hampshire University. 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. Terms in this set (22) contractual entry strategies in international business. _____ these are the items owned by a franchisee that has the same monetary value. Chapter 15 Licensing, Franchising and other Contractual Strategies Internatonal Business: Other mark ups and contributions like finance charges, sale of related products etc. The license has much stricter restrictions than the franchise. There are two major types of market entry modes: equity and non-equity. Staffing leverage . Quiz 15: Licensing, Franchising, and Other Contractual Strategies. 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. 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. First, mature products in a domestic market might find new growth opportunities overseas. Franchising iii. embargo, In the context of various strategies for reaching global markets, which of the following strategies. The book connects to students of the technological age, facing a diverse and evolving economic environment fueled by. 6. View chapter 15. 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. strategies. docx - Chapter 15: Licensing. c. Subway is a company that has spread worldwide through its expansion strategy. 2. Discover. 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. the franchising and licensing as market entry mode in general and in hotel industry. Partnering, licensing, franchising, joint venture creation, business acquisition, and Greenfield ventures represent the spectrum of market entry opportunities. Foreign. Licensing, Franchising and other Contractual Strategies. chapter 16 licensing, franchising, and other contractual contractual entry strategies in international business: exchanges where the relationship between the. Licensing of IPRs is at the heart of a franchise contract. Test. Licensing is a type of market entry whereby a company in one country transfers the right of a company in another country to use its unique production processes, patents, trademarks, technological achievements, and other valuable skills for a fee that is established under the 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. d. In licensing, the licensor has limited control over the operations of the licensee, whereas franchising involves extensive control and support provided by the franchisor. Internal: Operational. Licensing. ( True/False ) Question 1Start studying Ch 16: Licensing, Franchising, and other Contractual Strategies. Difference between licensing and. focal firm does everything for business and hands it over to customer after training. Chapter 16 - Licensing, Franchising, and Other Contractual Strategies. Two common types of contractual entry strategies are licensing and franchising. 2. The entry strategy in global business with the lowest risk is _____, while _____ is considered to have higher risk than the choices available. 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. Global Marketing Strategy for. Stage Three: Specify a specific format that is either equity based or contractual (nonequity based). The Franchiser requires the franchisee to make a minimum payment of $500 or more, and. 99/yearQuiz 15: Licensing, Franchising, and Other Contractual Strategies. Essentially, you need to decide whether you want to buy a franchise or own your own business while pursuing licensing opportunities. Buckley BA (Econ), MA, Phd Chapter 90 Accesses Abstract This. Internal: Strategic. Often regarded as second best to export or direct investment. A) the licensee B) patent. 25 “Market entry options”). 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. 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. Franchisor may impose inappropriate technical or managerial systems on the franchisee. Fresh features from the #1 AI-enhanced learning platform. 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. 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. arrangement in which an independent company is licensed to establish, develop, and manage the entire franchising network in its market and has the right to subfranchise to other franchisees, assuming the role of local franchisor. ( Multiple Choice) Question 2. Multiple Choice . •Franchising is an advanced form of licensing in which the focal firm, the franchisor,. - advanced form of licensing where firm allows another the right to an entire business system in exchange for fees, royalties, other forms of compensation. Brand owners lease their patents, software, or characters to other companies. Two common types of contractual entry strategies are licensing and franchising. Learn from your partner (and apply that knowledge within your organization) Study Chapter 5: Entry into Foreign Markets flashcards. fFranchising as an Entry Strategy. Multiple Choice . Franchising is governed. - As entry strategy, licensing requires neither substantial capital investment nor extensive involvement of licensor in foreign markets. ) Finding financing for a new business in other countries. 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. Indirect strategies are indirect/direct exporting, licensing, franchising and contractual agreements (see Table 2). 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. 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. Match. Exporting, joint ventures, direct investment, licensing, franchising, and other forms of an alliance is duly considered as market entry types. Verified Answer for the question: [Solved] Which of the following is true about franchising as an entry strategy? A)It provides firms with minimum control over foreign operations. Licensing, Franchising, and Other Contractual Strategies. Chapter 16 – Licensing, Franchising, and Other Contractual Strategies I. licensing vs franchising. 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. License 101 Where lives Entering?. export restraint b. 3. A strategic alliance is a collaborative agreement between two or more companies to pursue mutually beneficial objectives. Flashcards. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. One of the key differences between a franchise and a license is the limitation set out in licensing agreements. 6. Create flashcards for FREE and quiz yourself with an interactive flipper. Exporting. Two Types of Contractual Relationships. licensing is the limitation placed on licensing agreements. 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) _____. 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. Ch. export restraint b. Licensing vs Franchising The primary difference between a franchisee and a licensee is that franchisees can expect to have a much closer. e. Turnkey contracting. Flashcards. View Test Prep - licensing and franchising from ECONOMICS 12 at Xavier Institute Of Management & Research. Intellectual Property rights – legal claims that protect proprietary assets of firms and indivduals from unauthorized use by other parties III. B) The franchisor holds much power, including superior bargaining power. includes exchange of intangibles and services 3. While deciding between franchising vs. • 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. 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. Contractual Entry Modes 3. Governed by a contract that provides the focal firm with a moderate level of control over the foreign partner. 15. . Several strategies for franchising in East. Quiz 15: Licensing, Franchising, and Other Contractual Strategies. 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. -resource commitment. licensing, don’t forget that they are separate concepts and each of them offers promising prospects. C) use of a well-known, recognizable brand name D) The franchisee holds much power,. management contracts. 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). Licensing: An arrangement in which the owner of intellectual property. Franchising is a contractual international market entry mode as a licensing agreement when an organization wants to enter a foreign market quickly with low risk and resource commitment. Flashcards. 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 ________. Options for CONTRACTS include co-marketing, R&D contracts, turnkey project, strategic supplier/distributor, licensing/franchising. actively manage a foreign. 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. Entering. From a licensor standpoint, there are fewer risks in the selling and service of what is being. Chapter 15. 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. 4. Exporting, joint ventures, direct investment, franchising, licensing, and various other forms of strategic alliance. On the other hand,. Exporting. The licensor provides no technical support or assistance in most cases. , Contractual alliances include all of the following except: a. Learn. Franchising 5. As compared to other retailers, it is safe to say that IKEA has a unique organisational. The franchisee is. A license is much more limited than a franchise. cross border interaction between focal firm and foreign firm governed by a contract. View Chapter 16. In Licensing agreement and franchise, an overseas-based business will pay you a royalty or commission to use your. , Licensing Agreement, Copyright Licensing and more. When considering the three basic decisions a firm must make when it decides to enter a foreign market, it must determine the market. 15. In other words, a licensing agreement grants the licensee the ability to use intellectual. Licensing is an arrangement by which the owner of intellectual property grants another firm the right to use that property for a specific time period in exchange for royalties or other compensation. The legal claim through which the proprietary assets of firms and individuals are protected from unauthorized use by other parties. Table 7. , licensing and franchising) have lower up-front costs than investment modes do. Unique Aspects of Contractual Relationships. They typically include the exchange of intangibles and services. 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. when the factors that contributed to domestic success are transferable to foreign locations. distributing or retailing products that are traditionally manufactured by the franchisor. Licensing is a contractual arrangement where a company grants permission to another party to use its intellectual property or brand. Franchising allows franchisors to function effectively with a much leaner organization. Direct exporting. As it becomes evident from the definition, the transfer of the right of use is arranged in a license contract. The globalization of franchising took off in the 1990s as a result of push factors (domestic. Your matched tutor provides personalized help according to your question details. 15. 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. Firms often combine franchising with other entry strategies. To sum up, there are various methods that a firm can utilize in its foreign market entry market strategy. As a rule, licensing strategies inhibit control and produce only moderate returns. 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. 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. 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. B) It ensures payment from the licensee to the licensor upon receipt of an export shipment. 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.