Friday, June 10, 2011

How is licensing a good way to do international business?

Licensing provides a lower risk technique than FDI for firms wishing to enter foreign markets.  One advantage with this export strategy is that it requires less capital commitment than FDI.  Many different types of products/services/techniques can be licensed.

For example, Patents, trademarks, know-how, and copyrights are all examples of things that can be licensed. International franchising is a form of licensing that gives firms advantages in foreign markets.

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