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In the context of modes of international market entry, which of the following statements is true of licensing and franchising?

A. It is easy to extract knowledge for use in other locations through this mode.
B. It can increase the cost of selling in a foreign market.
C. It involves the risk of a local firm in alliance to become a competitor.
D. It offers the highest amount of control of all the various modes of entry.

User Kiren S
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Answer:

An international licensing agreement allows foreign firms, either exclusively or non-exclusively, to manufacture a proprietor’s product for a fixed term in a specific market. 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.

The five major ways of entering a foreign market are exporting, licensing, franchising, forming joint ventures or establishing a wholly owned subsidiary. 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.

The three primary factors that affect a company's choice of international market entry strategy are: Marketing: Companies consider which countries contain their target market and how they would market their product to this segment. Sourcing: Companies choose whether to produce the products, buy them or work with a manufacturer overseas.

License : The legal terms under which a person is allowed to use a product. Suppose Company A, a manufacturer and seller of Baubles, was based in the US and wanted to expand to the Chinese market with an international business license.

thus option C is right

Step-by-step explanation:

User Bart Verkoeijen
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