Test 2 chapter 9

Question 1

Licensing

Answer 1

A contractual agreement whereby one company (the licensor) makes an asset available to another company (the licensee) in exchange for royalties, license fees, or some other form of compensation
Patent
Trade secret
Brand name
Product formulations

Question 2

Advantages to Licensing

Answer 2

Provides additional profitability with little initial investment
Provides method of circumventing tariffs, quotas, and other export barriers
Attractive ROI
Low _______to implement
License agreements should have cross-technology agreements to inequities

Question 3

disadvantages to Licensing

Answer 3

Limited participation
Returns may be lost
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Licensee may become competitor
Licensee may exploit company resources

Question 4

Joint Ventures

Answer 4

Entry strategy for a single target country in which the partners share ownership of a newly-created business entity
Builds upon each partner’s strengths
Examples: Budweiser and Kirin (Japan)

Question 5

Joint Ventures Advantages

Answer 5

Allows for ______–financial and political
Provides opportunity to learn new environment
Provides opportunity to achieve synergy by combining strengths of partners
May be the only way to enter market given barriers to entry

Question 6

Joint Ventures disadvantages

Answer 6

Requires more investment than a licensing agreement
Must share rewards as well as risks
Requires strong coordination
Potential for conflict among partners
Partner may become a competitor

Question 7

Investment viaDirect Foreign Investment

Answer 7

Start-up of new operations
Greenfield operations or 
Greenfield investment
Merger with an existing enterprise
Acquisition of an existing enterprise
Examples: Volkswagen

Question 8

global strategic partnership

Answer 8

Possible terms:
Collaborative agreements
Strategic alliances
Strategic international alliances
Global strategic partnerships

Question 9

The Nature of Global Strategic Partnerships

Answer 9

Participants remain independent following formation of the alliance
Participants share benefits of alliance as well as control over performance of assigned tasks
Participants make ongoing contributions in technology, products, and other key strategic areas

Question 10

Five Attributes of True Global Strategic Partnerships

Answer 10

Two or more companies develop a joint long-term strategy
Relationship is reciprocal
Partners’ vision and efforts are global
Relationship is organized along horizontal lines (not vertical)
When competing in markets not covered by alliance, participants retain national and ideological identities