GMS 200 Lecture Notes - Lecture 3: Franchising, Kfc, Intellectual Capital
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GMS 200 Full Course Notes
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Document Summary
Trademarks and licensing: licensing agreement: an international marketer (i. e. licensor) may permit another company to use intellectual capital (ip) such as trademarks in exchange for compensation in royalty fees, royalty fees (i. e. 10% of sales) may reduce the profit margin of the licensee, but yield several benefits, global trademark allows the company to quickly become international without having to spend considerable time and money in developing its own brand. Foreign direct investment (fdi: firm owns major assets and/or undertakes production abroad through subsidiaries, foreign subsidiary may be either acquired ( brown field investment ) or newly establish through greenfield investments, parents company has ownership and control over its overseas operations, but does so by committing a considerable amount of financial resources and managerial time to foreign markets, this is the most costly and risky of the market entry strategies considered.