A firm desiring to enter a foreign market with a limited investment should consider licensing.

Question

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Licensing allows a firm to enter a foreign market with a limited investment by granting another company in that market the rights to produce and sell its products or use its technology or brand name for a fee or royalty. This way, the licensee bears most of the investment and risk associated with entering the foreign market, while the licensor receives a share of the revenues and retains control over the quality and consistency of its intellectual property. Licensing can be a cost-effective and flexible way for firms to expand their global reach, especially when they lack the resources, knowledge, or experience to establish their own operations abroad.

A Firm Desiring to Enter a Foreign Market with a Limited