Franchising Vs Licensing Essays On Poverty

Essay Questions 1. Compare and contrast licensing and franchising as foreign market entry strategies. Why is franchising a more comprehensive strategy? A franchise is a license issued to someone to operate a business using a common brand name, a common operating support system and involving the payment of initial and/or ongoing fees. Franchising is more comprehensive strategy because you already have the knowledge of the system and how the business operates. So basically you from franchising you get a well-established and successful business plan.2. Discuss three advantages and three disadvantages of licensing from the perspective of the licensor. Does not require capital investment or presence of the licensor in the foreign market.Ability to generate royalty income form existing intellectual propertyAppropriate for entering markets that pose substantial country riskRevenues are usually more modest than with other entry strategiesDifficult to maintain control over how the licensed asset is usedDoes not guarantee a basis for future expansions in the market3. Discuss three advantages and three disadvantages of franchising from the perspective of the franchisee. Gain a well known recognizable brand nameOperate an independent businessIncrease likelihood of business successInitial investment or royalty payments maybe substantialFranchises required to purchase supplies, equipment and products from the franchisor onlyThe franchisor holds much power, including superior bargaining power4. Compare and contrast turnkey contracting and build-operate-transfer (BOT) arrangement. Briefly explain several criteria on which you can base your selection of one over the other as an entrystrategy.                 Turnkey contracting – arrangement where a firm or a consortium of firms plans, finances, organizes, manages, and implements all phases of a project abroad and hands it over to a foreign county after training local personnel. Typical in the construction and engineering services industries.            Build-Operate-Transfer (BOT) arrangement – a firm or a consortium of firms contracts to build a major facility abroad, operates it for specified period, and then transfers ownership to the project sponsor, typically the host-country government.

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