Question

Share your views on what you consider are the" key elements" when a company enters global market through

(i) Licensing, (ii) franchising, and (iii) full ownership. - list at least 5 points in Bullet points format and cover all three forms of entry

Answer 1

1.licencing- A perfect way to enter a new international market is licencing. This is a look at what licencing is and what the advantages of licencing are. Licensing is a statutory agreement in which a corporation, the licensor, provides a foreign company, the licensee, with intellectual properties in return for royalty payments. Let 's say, because of complicated laws and regulations or because the cost of shipping is prohibitive, you are unable to sell to an overseas market. That's where licencing runs. In exchange for a royalty charge, you licence a foreign corporation to import and distribute your goods in that market.

2. Franchising- A ongoing partnership in which a franchisor grants the franchisee a licenced right to do business and provides assistance for monetary consideration in the organisation, recruitment, merchandising, promotion and management of the franchise. Franchising is a mode of business in which the owner (franchisor) gains delivery in associated dealers (franchisees) of a commodity , service or process.

3. Full ownership- The American market is massive for almost all, but for many developers, it's not big enough. The remainder of the world is their oyster for these growth-minded business owners. Finding foreign development as an importer-exporter by going global provides lots of opportunities. Some of the specific benefits offered by globally expanding effectively include:

Through seeking new markets to sell them in, you can prolong the sales life of current goods and services. You can minimise the dependence on the markets in the United States that you have created. If the company is plagued through destabilising volatility in your markets due to seasonal shifts or demand spikes, you can balance out your sales by tapping markets with separate or even countercyclical volatility