GMS 200 Lecture Notes - Lecture 4: Franchising, Takers, Oligopoly
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Is a contractual agreement between one party called the franchisor, and another party called the franchisee. The franchisor grants the franchisee the right to use the franchisors name, trademark, business processes and product, usually within a specified territory. Operates in a foreign country through co-ownership by foreign and local partners. Companies typically pursue joint venture for one of four reasons: Gain faster entry into a new market. Expand business development by gaining access to distributor networks. Strong local market for partners own products. Global strategic alliances: a partnership in which foreign and domestic firms share resources and knowledge for mutual gain. Foreign subsidiaries: local operation completely owned by a foreign firm. Types of market structure: perfect competition acquisition. Price takers can"t control the price. Buyers have complete information about the product being sold and the prices charged by each firm. Freedom of entry and exit in the market.