Licensing an innovation to another firm, rather than developing and commercializing it inhouse, has the following advantage:
A)Increases managerial control of development and commercialisation.
B)Reduces the cost and risk of development and commercialisation.
C)Increases the profitability of development and commercialisation.
D)Reduces managerial control of development and commercialisation.

Question

Quizplus · Accepted Answer

Licensing an innovation to another firm reduces the cost and risk of development and commercialization. The licensee takes on the responsibility for developing and commercializing the innovation, which can reduce the financial burden and risk for the licensor. Additionally, licensing can provide the licensor with a source of revenue through licensing fees and royalties. However, it also means that the licensor will have less control over the development and commercialization process.

Licensing an Innovation to Another Firm, Rather Than Developing and Commercializing