Question

Below are the assignment instructions, I italicized the two aspects I do not understand. I am not sure what the budgeting analysis of licensing and legal recognition would consist of in global expansion. I only need answers to those two aspects of this report.

Assignment Instructions: Think of a company in your area that makes a product that you really like. If you cannot think of a company or product you can create one. Now, imagine you are asked to present a budget and financial plan to help the company to take that favorite local product globally. If you wish, you may select a single country to focus on. In your capacity as a budgeting and financial management consultant for this company, you have been asked to create a financial plan with a 3-year annualized budget for expansion. Your plan should include budgeting analysis of licensing, legal recognition, trademarking, partnerships (if needed), marketing, advertising, warehousing, distribution, quarterly market reporting, and other elements you wish to add. Your goal is to recommend a budget that will cover the expansion of the product distribution into at least three new countries during the 3 years. You will present your plan as a PowerPoint presentation. Remember, this is a marketing piece showing your skills as a budgeting and financial consultant. You really want to impress your clients with a solid budget and analysis on how to make their local product a global product.

Answer 1

Licensing:

Licensing is great way to expand your business in a new foreign market. Licensing is a contractual agreement by which the company(licensor), offers proprietary assets to a foreign company (the licensee), in exchange for royalty fees. The licensor’s earnings usually consists of one-time payments, technical fees, and royalty payments which are usually calculated as a percentage of revenue,

To make the budget of licensing, it should include the one-time payment and technical fees and royalty payments for the subsequent years.

Legal Recognition:

Some countries are known to be very controversial, so it is important to have legal processes in place to minimize unnecessary business risks. In addition, government agencies have strict requirements that require legal documentation to be drawn up prior to operating in the country. Being proactive takes upfront money, but more than offsets downstream risks and liabilities.

To make the budget of legal, it should include the cost in creating localized trade agreements, obtaining certifications to ensure compliance of industry regulations, performing services such as dispute resolution, immigration, customs, shipping and maintaining company records through outsourcing.

Note: The cost and the revenue involved in budgeting of licensing and legal recognition will depend on the industry chosen.