Licensing entry mode. 1. LOGO Karen Xiomara Díaz Dussan Yina Jasbleidy Sánchez Prieto; 2. LOGOLICENSING Is a contractual agreement. Licensing. Licensing is a business arrangement in which one company gives another company permission to manufacture its product for a specified payment. To summarize, in this foreign market entry mode, a licensor in the home country makes limited rights or resources available to the licensee in the host country. Licensing is a low cost of entry mode and may lead to possible further direct investment with licensees down the line. A relatively safe and low.


Author: Ms. Meredith Predovic
Country: Italy
Language: English
Genre: Education
Published: 7 August 2014
Pages: 348
PDF File Size: 18.16 Mb
ePub File Size: 24.16 Mb
ISBN: 176-4-49122-142-9
Downloads: 90481
Price: Free
Uploader: Ms. Meredith Predovic


You are also disclosing IP knowledge which can licensing entry mode to technology transfer and future unwanted competition. Good examples of this are well documented in technology sector where O.

Five Modes of Entry Into Foreign Markets | Bizfluent

Original Equipment Manufacturers later use their smarts developed from making others equipment to launch their O. Own Brand Manufacture often licensing entry mode additional features and benefits and disrupt the incumbents in their own industry e.

ASUS laptops from Taiwan. Another world renowned brand that uses wholesale licensing entry mode is the Coca-Cola Company of Atlanta granting franchise rights to global bottlers to manufacture, distribute and market their beverages in licensing entry mode territories.

Other examples of franchising in retail might include car dealer networks or petrol retailers who are franchise retail operators for the vehicle manufacturers or fuel manufacturers.

The company wants to enter a market rapidly. Can your company handle the risk?

Foreign market entry modes - Wikipedia

The company must be able to deal with the risk of business losses from theft of intellectual property. Can your company lock into a contract?


The company must be able to remain in the trading licensing entry mode for a set period of time. Licensing can be a quick, low-investment and financially lucrative market entry strategy. To be successful at licencing you need a high-demand product or service, limited competition and the willingness to give up control of some of the promotional and logistical aspects of selling your commodity.


licensing entry mode About the author Author: You can find some of my work on TradeReady. Here are licensing entry mode more options. Licensing is a good choice in cases where there are barriers to import and investment, where legal protection is possible in the target environment, and where there is a low sales potential in the target country.


The advantages of a licensing arrangement include: Licenses can be for marketing or production. Franchising Franchising is a typical North American process for rapid market expansion but it licensing entry mode gaining traction in other parts of the world.

Franchising works well for firms that have a repeatable business model eg. Two caveats are required when considering using the franchise model.

How to enter new markets…Contractual modes of entry | Creatoblog

The first is that your business model should either be very unique or have strong brand recognition that can be utilized internationally and secondly you may be creating your future competition in your franchisee. The corrupt legal system in many countries, such as Russia Samara, Three different rules of entry mode selection[ edit ] The following licensing entry mode were based on the statement of Hollensen: The decision maker uses the same entry mode licensing entry mode all foreign markets.

The companies use this rule as the entry mode selection ignore the differences of individual foreign markets. The performance of this selection could not be calculated, because it highly depends on the luck of the manager.

Have a great product or service? Licensing could be the right market entry strategy for you

The decision maker uses a workable entry mode for each foreign licensing entry mode, which means that the manager use different entry modes depend on the time stage or the business stage.

For example, as the first step to international business, companies tend to use exporting.

Similar to exporting, companies retain their physical operations in their native countries, but ship products overseas.

However, whereas in exporting, companies contract with local businesses, licensing entry mode the Internet they take orders directly from consumers.

Related Post