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1、licensinglicensing is another popular approach to international business.Licensing agreements entitle one company to utilize some some or all of another firms intellectual property(patents,trademarks,brandnames,copyrights,or trade secrets) and technology and produce or market its product in return f
2、or a royalty or fee.Example Underwear manufacturer Jockey , for example ,licenses the rights to use the Jockey name to certain foreign manufactures of womens active wear, sleepwear, and slippers.Jockey licenses its products in more than 120 countries but is careful that all such arrangements add val
3、ue to the Jockey name.Compare to the product export, direct investment, licensing has a unique advantage:(1) To avoid the importer restrictions, it is the best way to product export conversion form.(2) It can significantly reduce or avoid the international marketing of all kinds of risks.(3)The high
4、 marketing cost can be saved by improving the ability of price competition.(4) It is for the service enterprises to enter the international market.Such as various types of consulting, technology services company enterprise. They dont produce products, licensing make it more easy to enter in internat
5、ional market(5)Making small manufacturing enterprises can enter the international market .This advantage is particularly important for many manufacturing enterprises in China.Disadvantages of licensing (1) Licensors must meet certain conditions. Not any enterprise or any technology can be for licens
6、ing. Only when companies with well-known trademark, good reputation, advanced technology can appeal to the recipients, licensing can become a reality.(2 It is hard for the licensor to control the market management of target countries . Relationship between granter and recipient is not owner and memb
7、er, but the assignor and assignee , no matter how the market operating conditions of the recipient, grant party cannot directly control them.(3) Grant party net benefits may be restricted by the target countries operating conditions. (4) Grant may cultivate their competitors in the international mar
8、ket. Granted party transfers some of its technical superiority and the exclusive power to the recipient. They must give up part of the real market and potential market . And it is given the risk of loss. Therefore, must weigh the pros and cons before the technology export, estimate the risk loss, an
9、d formulate the remedy, and then make a decision.Classifications of licensing Exclusive licensing .At a particular time and place, the receiving party of technology under the license agreement enjoy the exclusive right to use the technology. And the licensor is not allowed to neither use this techno
10、logy at the same time in the same place , nor transfer it to a third party . Ordinary licensing. At a particular time and place, the licensor not only can continue to use their technology ,but also transfer technology to the second party under the license agreement . In addition, the technology can
11、be transferred to a third party.Cross-licensing .The two parties exchange the rights of use technologies through license agreement. This kind of licensing generally not charge. transferable licensing , also called sublicensing , is a special type of technology trade, refers to the licensee is not only authorized to use the technology, but also allowed to transfer it to a third party to use again.
