Which of the following is a disadvantage of licensing for technological firms?
A) It is not appropriate for entering markets that pose substantial country risk.
B) It requires high capital investment and the presence of the technological firm in the foreign market.
C) It restricts flexibility in the foreign market due to the technological firm's ownership of key assets in the target market.
D) It increases the risk of creating a future competitor.

Question

Quizplus · Accepted Answer

Licensing can lead to the licensee gaining enough knowledge and expertise to eventually compete with the licensor, thus increasing the risk of creating a future competitor. This is a notable disadvantage as it can erode the licensor's market share and competitive advantage over time.

Which of the Following Is a Disadvantage of Licensing for Technological