Wonder Cat Licensing (Scenario)
Wonder Cat is a popular, new cartoon series created by the U.S-based All Cartoon Channel (ACC). Currently, the only Wonder Cat item available for sale are shirts that are sold exclusively through the ACC Web site. The cartoon series is a big hit in China, and as a result ACC has been approached by a Chinese firm about a licensing agreement. ACC executives are considering the pros and cons of such an agreement before making any final decisions.
-Which of the following most likely supports an ACC decision to NOT enter a licensing agreement with the Chinese firm?
A) ACC does not want to invest capital for FDI in the Chinese market.
B) ACC desires a low-risk, low-cost strategy to internationalize the Wonder Cat character.
C) The Chinese market restricts ownership of local operations by foreign firms.
D) ACC wants to maintain firm control of how the Wonder Cat character is used.

Question

Quizplus · Accepted Answer

Maintaining firm control over how the Wonder Cat character is used is a key reason for ACC to decide against entering a licensing agreement, as licensing could lead to less control over the brand and its representation.