Some firms grant licenses to other firms in order to reduce the competitive level of a potential rival,especially in the fashion industry.

Question

Quizplus · Accepted Answer

This strategy of granting licenses to reduce competition is known as licensing out, and it is commonly used in the fashion industry. By allowing another firm to use their designs or trademarks, a company can decrease the threat of a potential rival entering the market and taking away market share.

Some Firms Grant Licenses to Other Firms in Order to Reduce