Scenario: Sports Stuff Inc.
Herb Graham is vice president of Sports Stuff Inc., a business that develops, manufactures, and markets sports products. The company is looking to expand its operations into the European market. Herb believes that if the company expands its product line to include products reflecting sports that are popular in Europe, the company will achieve success there.
-Herb knows that much of the success his company enjoys is due to the patents and copyrights that protect the company's products.If Sports Stuff chooses an entry mode in which it grants another firm the right to use its intangible property for a specified period of time,it would be engaging in ________.
A) a turnkey project
B) franchising
C) licensing
D) a joint venture

Question

Quizplus · Accepted Answer

Licensing involves granting another firm the right to use a company's intangible property, such as patents and copyrights, for a specified period of time. This would allow Sports Stuff Inc. to expand its operations into the European market while maintaining control over its valuable intellectual property. Franchising involves providing another firm with the right to use a company's name, products, and operating procedures in exchange for a fee, which may not be as relevant in this scenario. Similarly, a turnkey project involves a company providing another firm with a fully functional facility, which may not be applicable in this case. Finally, a joint venture involves two or more companies forming a new legal entity to undertake a specific business project, which is not mentioned as an option in this scenario.