Which of the following is a drawback of licensing?
A)Licensing becomes impractical in the face of barriers to investment.
B)Licensing does not give a firm tight control over manufacturing,marketing,and strategy.
C)Licensing entails the licensor to commit substantial financial resources.
D)The licensor could potentially incur heavy pioneering costs.

Question

Quizplus · Accepted Answer

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 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 Drawback of Licensing