licensing entry mode

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Karen Xiomara Díaz Dussan Yina Jasbleidy Sánchez Prieto

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LICENSING Is a contractual agreement between

two companies of different countries, by means of

which a international company concedes to other

company abroad the right to use :

-A productive process

-A patent, a registered brand

-A trade secret or other intangible assets in

exchange for an initial fixed payment

- A royalty or both.

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LICENSOR LICENSE LICENSEE

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Parent company of international

enterprise

One or more of its foreign affiliates

International Enterprise Independent foreign, private or

government enterprise

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The licensee normally sells the product in the

domestic market with the same characteristics

that it was before.

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Is the right to exploit a

brand, product or service

in which the technical

knowledge or technical

advice is transmitted into

produce or sell goods

according to the methods

established by trademark

holder.

FRANCHISING

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Is a type of licensing that consists in establish a working

arrangement between the two companies. When licensor

permits the licensee to manufacture a product under the

brand of the first subject to compliance with certain quality

requirements.

MANUFACTURING

CONTRACTS

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Is register an invention that serves its creator

to protect against the manufacture or sale of

the mechanism by another member.

CESION PATENTS

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Low cost to

the licensor

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They can be

served markets

marginal

or inaccessible

Ability to use

knowledge

management

and policies

local marketing

No need for a

big investment

own resource

managers

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It requires little capital

investment and

usually provide a high

return on

initial investment

Wide range

of shapes

contractual

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.

.

.

Potential creation of future

competitors

Possible marketing

underperformance

may not be controlled

Limited flexibility to apply sophisticated technology

and marketing advances at a later stage.

Limited profit potential

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.

.

.

Policing the implementation of

the licensing agreement is very

expensive.

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The difference between Licensing and Franchising is:

In the Licensing there aren’t capacitation, product development, technical consultants; the license has more autonomy to realize that process agree to his way.

In the Franchising the franchisee receive technical support, capacitation, product development strategies and other supports of franchisor.

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REFERENCES

http://plataforma.unibague.edu.co/pluginfil

e.php/3001/mod_scorm/content/1/docume

nts/Chapter%208%20Entering%20the%20

international%20marketing.pdf

http://www.businessdictionary.com/

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www.themegallery.com