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3 years ago
What characteristics of licensing agreements make the arrangements appealing to SMES? Explain your answer in a short essay.
Textbook 

International Business: Strategy, Management, and the New Realities


Edition: 1st
Authors:
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2 years ago
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As an entry strategy, licensing requires neither substantial capital investment nor involvement of the licensor in the foreign market. Licensing allows the firm to gain market presence without FDI. For this reason, it is a preferred strategy of small and medium-sized enterprises (SMEs), which may lack the resources to internationalize through more costly entry strategies. Licensing allows the firm to exploit the results of research and development that it has already conducted. Once the licensing relationship is established, the licensor need invest very little additional effort while it receives a stream of royalty income until the end of the contract period. Thus, unlike other foreign entry strategies, the licensor bears no costs of establishing a physical presence in the market or maintaining inventory there.
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wrote...
2 years ago
Thanks, JewelSmith
wrote...
2 years ago
Excellent stuff, will be around if you need moi Slight Smile
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