Which of the following is a disadvantage of licensing?
A) It does not help firms that lack capital to develop operations overseas.
B) It does not give a firm the tight control over strategy that is required for realizing experience curve and location economies.
C) It cannot be used when a firm possesses some intangible property that might have business applications.
D) The firm has to bear the development costs and risks associated with opening a foreign market.

Question

Quizplus · Accepted Answer

Licensing typically involves each licensee setting up its own production operations. This severely limits the firm's ability to realize experience curve and location economies by producing its product in a centralized location.

Which of the Following Is a Disadvantage of Licensing