What is a drawback of licensing as a mode of entry into foreign markets?
A) The licensor has to bear all costs and risks associated with developing a foreign market.
B) Licensing does not give a firm tight control over manufacturing, marketing, and strategy.
C) Licensing does not benefit firms lacking the capital to expand operations overseas.
D) Licensing deals fail when there are barriers to foreign investment in a particular country.
E) A firm that enters into a licensing deal with a foreign country will have no long-term interest in that country.

Question

Quizplus · Accepted Answer

Licensing does not give a firm tight control over manufacturing, marketing, and strategy, which can be a significant drawback for companies looking to maintain control over their brand and operations in foreign markets.

What Is a Drawback of Licensing as a Mode of Entry