What is licensing as a market entry strategy?

What is licensing as a market entry strategy?

Licensing is a transfer-related market entry strategy. It involves a company (known as the licensor) granting permission to a company in another country to use its intellectual property for a defined time period.

What are the 5 international market entry strategies?

Key Takeaways

  • The five most common modes of international-market entry are exporting, licensing, partnering, acquisition, and greenfield venturing.
  • Each of these entry vehicles has its own particular set of advantages and disadvantages.

What is franchising market entry strategy?

Franchising is a foreign market entry strategy where a semi-independent business owner (the franchisee) pays fees and royalties to the franchiser to use a company’s trademark and sell its products and/or services (Kotler & Armstrong, 2012).

What are examples of market entry strategies?

The most common market entry strategies are outlined below.

  • Exporting. Exporting means sending goods produced in one country to sell them in another country.
  • Licensing/Franchising. Holiday Inn, London.
  • Joint Ventures.
  • Direct Investment.
  • U.S. Commercial Centers.
  • Trade Intermediaries.

What are the two key advantages that are associated with licensing as a market entry mode?

1. Because the licensee is typically a local business that will produce and market the goods on a local or regional basis, 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.

What are the six types of entry modes?

Let’s understand in detail what each of these modes of entry entail.

  • Direct Exporting. Direct exporting involves you directly exporting your goods and products to another overseas market.
  • Licensing and Franchising.
  • Joint Ventures.
  • Strategic Acquisitions.
  • Foreign Direct Investment.

Which of the following market entry strategies are the most common for existing firms?

Solution(By Examveda Team) Brand extender market entry strategies are the most common for existing firms. Brand Extension is the use of an established brand name in new product categories.

What is licensing in strategic management?

Licensing is another way to enter a foreign market with a limited degree of risk. Under international Licensing, a firm in one country permits a firm in another country to use its intellectual property( Patents, trade marks etc).

Why are market entry strategies important?

Market entry strategies are important because selling a product in an international market requires precise planning and maintenance processes. These strategies enable companies to stay organized before, during and after entering new markets.

What are 4 licensing objectives?

the prevention of crime and disorder; public safety; the prevention of public nuisance; the protection of children from harm.

What are the market entry strategies for a company?

Market Entry Strategies. There are a variety of ways in which a company can enter a foreign market. No one market entry strategy works for all international markets. Direct exporting may be the most appropriate strategy in one market while in another you may need to set up a joint venture and in another you may well license your manufacturing.

Is licensing the best way to enter a foreign market?

Make sure you work with an international attorney to protect your assets and intellectual property well in advance of sealing any deal. Licensing may not be the most profitable way to enter a foreign market, but it does offer less risk than a direct investment, which can be time-consuming and costly.

What is an international licensing agreement?

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.

What are the most common market entry strategies for SMEs?

Some of the most common strategies for market entry include: Exporting Licensing Franchising Partnering Joint ventures Turnkey projects Greenfield investments