Licensing A Licensing Agreement Is An A
Licensing A licensing agreement is an arrangement whereby a licensor grants the rights to intangible property to another entity (the licensee) for a specified period, and in return, the licensor receives a royalty fee from the licensee. 15 Intangible properties includes patents, inventions, formulas, processes, designs, copyrights, and trademarks
Advantages
Disadvantages
the firm does not have to bear the development costs and risks associated with opening a foreign market. Licensing is very attractive for firms lacking the capital to develop operations overseas. it does not give a firm the tight control over manufacturing, marketing, and strategy that is required for realizing experience curve and location economies.
Licensing is also often used when a firm wishes to participate in a foreign market but is prohibited from doing so by barriers to investment competing in a global market may require a firm to coordinate strategic moves across countries by using profits earned in one country to support competitive attacks in another. used when a firm possesses some intangible property that might have business applications, but it does not want to develop those applications itself. Technological know-how constitutes the basis of many multinational firms’ competitive advantage. Most firms wish to maintain control over how their know-how is used, and a firm can quickly lose control over its technology by licensing it.
Similarities
differences
As with licensing, the franchiser typically receives a royalty payment, which amounts to some percentage of the franchisee’s
Whereas licensing is pursued primarily by manufacturing firms, franchising is employed primarily by service firms. 1
Franchising is similar to licensing, although franchising tends to involve longer-term commitments than licensing. Franchising is basically a specialized form of licensing in which the franchiser not only sells intangible property (normally a trademark) to the franchisee, but also
Advantages
Disadvantages
the firm does not have to bear the development costs and risks associated with opening a foreign market. Licensing is very attractive for firms lacking the capital to develop operations overseas. it does not give a firm the tight control over manufacturing, marketing, and strategy that is required for realizing experience curve and location economies.
Licensing is also often used when a firm wishes to participate in a foreign market but is prohibited from doing so by barriers to investment competing in a global market may require a firm to coordinate strategic moves across countries by using profits earned in one country to support competitive attacks in another. used when a firm possesses some intangible property that might have business applications, but it does not want to develop those applications itself. Technological know-how constitutes the basis of many multinational firms’ competitive advantage. Most firms wish to maintain control over how their know-how is used, and a firm can quickly lose control over its technology by licensing it.
Similarities
differences
As with licensing, the franchiser typically receives a royalty payment, which amounts to some percentage of the franchisee’s
Whereas licensing is pursued primarily by manufacturing firms, franchising is employed primarily by service firms. 1
Franchising is similar to licensing, although franchising tends to involve longer-term commitments than licensing. Franchising is basically a specialized form of licensing in which the franchiser not only sells intangible property (normally a trademark) to the franchisee, but also