Contractual means of entering foreign markets

Question 1

Intellectual Property

Answer 1

Ideas or works created by firms or individuals, such as patents, trademarks, and copyrights. Includes such knowledge-based assets of the firm or individuals as industrial designs, trade secrets, inventions, works of art, literature, and other “creations of the mind”.

Question 2

Advantages and disadvantages of Licensing

Answer 2

Advantages for licensor
Low investment
Low involvement
Low effort, once established 
Low-cost initial entry strategy

Disadvantages for licensor
Performance depends on the foreign licensee
Licensor has limited control over its asset(s) abroad
Runs the risk of creating a future competitor

Question 3

Largest Global franchisor

Answer 3

Mcdonalds

Question 4

Advantages and Disadvantages of Franchising

Answer 4

Advantages for franchiser:
Low investment;
Can internationalise quickly to many markets;
Low effort, once established; and
Can leverage franchisees’ local knowledge.

Disadvantages for franchiser:
Maintaining control over franchisees may be difficult;
Franchiser has limited control over its assets abroad;
Risks creating a future competitor.

Question 5

Challenges of licensing and franchising in emerging markets

Answer 5

Most residents of developing economies and emerging markets lack sufficient income to patronise restaurants.

Most do not live in the major urbanised areas where international franchisors are concentrated.

Laws in such countries vary and often evolve quickly.

Food and eating habits are rooted in national culture.

Successful franchisors carefully study economic, demographic, legal, and cultural dimensions before targeting foreign countries them with franchises.

Question 6

Global treaties safeguarding intellectual property

Answer 6

Paris Convention for the Protection of IP.
Berne Convention for the Protection of Literary and Artistic Works.
Rome Convention for the Protection of Performers and Broadcasting Organizations.

The WTO created the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).