Licensing is NOT attractive to which of the following firms?
A)Firms lacking the capital to develop operations overseas
B)Firms unwilling to commit substantial financial resources to an unfamiliar market
C)Firms requiring tight control of operations for realizing experience curve and location economies
D)Firms wanting to explore markets but prohibited from doing so by investment barriers
E)Firms with intangible properties with business applications that it does not want to develop itself

Question

Quizplus · Accepted Answer

Licensing is very attractive for firms lacking the capital to develop operations overseas. In addition, licensing can be attractive when a firm is unwilling to commit substantial financial resources to an unfamiliar or politically volatile foreign market. Licensing is also often used when a firm wishes to participate in a foreign market but is prohibited from doing so by barriers to investment. Licensing is frequently used when a firm possesses some intangible property that might have business applications, but it does not want to develop those applications itself. Licensing does not give a firm the tight control over manufacturing, marketing, and strategy that is required for realizing experience curve and location economies.

Licensing Is NOT Attractive to Which of the Following Firms