GMS 723 Lecture Notes - Lecture 5: Intangible Property, Experience Curve Effects, Franchising

• School: Ryerson University
• Department: Global Management Studies
• Course: GMS 723
• Professor: Franklin Ramsoomair

Document Summary

The choice of mode for entering a foreign market is a major issue which challenges international businesses. They must decide: which foreign markets? o. Avoids the often substantial costs of establishing manufacturing operations in the host country. Exporting may help a firm achieve experience curve and location economies. Occur when a contractor handles all details of a project for a foreign client, including the training of operating personnel. At completion of the contract, the foreign client is handed the key to a plant that is ready for full operation. Licensing"s agreement: arrangement where a licensor grants the rights to intangible property to another entity (the licensee) for a specified period and in return, the licensor receives a royalty fee from a licensee. Franchising: specialized form of licensing in which a franchisor not only sells intangible property (normally a trademark) to a franchisee, but also insists that the franchisee agrees to bide to strict rules as to how business is conducted.