Question

Which of the following is an advantage of international licensing? a. It eliminates the risk of losing control over a technology that the company owns. b. It enables the company to coordinate its strategy efficiently to achieve competitive advantage. c. It allows the company to collect profits from one licensee and use it to support others. d. It takes away the pressure of development costs and risks associated with opening up a foreign market from the company. e. It enables the company realize scale economies and location economies through manufacturing products in a centralized location.

Answer 1

The answer is d.

Step-by-step explanation:

International licensing enables a licensor company to eliminate the risks associated with opening up a foreign market, including development costs.

It also supplies the licensor company a source of passive income, which can run up for several years. The company is not required to make any investments in the foreign market.

With international licensing, the licensor company is enabled to enter a closed market, jumping the borders and other limitations.

There are also numerous advantages gained by the licensee entity, including access to technology and the elimination of development costs.

Answer 2

D . It takes away the pressure of development costs and risks associated with opening up a foreign market from the company.

Step-by-step explanation:

1. Licensing enables companies to circumvent tariffs, quotas, or similar export barriers

2. Licensees are granted considerable autonomy and are free to adapt the licensed goods to local tastes

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.