Scenario - Boseman Clothier,Inc.
Boseman Clothier,Inc.has been in operation for over 75 years.It is based in South Carolina,USA and is a well-recognized name in the industry.It produces custom fitted men's suits that are in high demand throughout the world.The average cost of one of its suits is in excess of five thousand U.S.dollars.Boseman proudly states it has more customer orders than its one store can fill within the next six months.With growing demand from overseas,the company has recently decided to open operations in four foreign markets next year.
Boseman realizes the potential of this move will generate increased revenues for the company.One of the options it is contemplating is exploring forming an international joint venture.Boseman is also entertaining the thought of opening operations differently in each of the four new foreign markets.The company feels the use of different strategies may increase its odds of generating profits in each different market.
-Boseman Clothier,Inc.has indicated it would like to use different entry strategies for each of the four markets it plans to enter.Which of the following would not be considered a benefit from using licensing in the other foreign markets it plans to enter?

Question

Quizplus · Accepted Answer

Licensing involves giving permission to a foreign company to use a company's product, trademark, or production processes in exchange for a fee. While licensing may have some benefits, such as allowing Boseman to generate revenue without investing in production facilities in the foreign country, it also means that Boseman has less control over the quality of its products, and the foreign partner may choose to terminate the licensing agreement at any time. Therefore, it is not considered the entry strategy with the least amount of risk.