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This a MCQ (Multiple Choice Question) based practice test of Chapter 10 - International Business of Business Studies of Class XI (11) for the quick revision/preparation of School Board examinations
Q In which of the following modes of entry, does the domestic manufacturer give the right to use intellectual property such as patent and trademark to a manufacturer in a foreign country for a fee
- a)Joint venture
- b)Licensing
- c)Contract manufacturing
- d)None of these
Correct answer is option 'B'. Can you explain this answer?
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Verified Answer
This a MCQ (Multiple Choice Question) based practice test of Chapter 1...
Licensing means a business arrangement in which one company gives another company permission to manufacture its product for a specified payment. Such permission includes right to use intellectual property.
Most Upvoted Answer
This a MCQ (Multiple Choice Question) based practice test of Chapter 1...
Explanation:
The correct answer is option 'B', which is licensing.
Mode of Entry:
Different modes of entry are used by companies to enter foreign markets. These modes of entry include:
- Exporting: Selling goods and services produced in one country to another country.
- Joint Venture: A partnership between a domestic company and a foreign company to create a new entity.
- Licensing: Granting permission to a foreign company to use intellectual property such as patents, trademarks, or copyrights for a fee.
- Contract Manufacturing: Outsourcing the production of goods to a foreign company.
Licensing:
Licensing is a mode of entry in which a domestic manufacturer gives the right to use its intellectual property, such as patents, trademarks, or copyrights, to a manufacturer in a foreign country for a fee. In this mode, the domestic manufacturer (licensor) grants permission to the foreign manufacturer (licensee) to produce and sell its products under its brand name or trademark.
Advantages of Licensing:
Licensing offers several advantages to both the licensor and the licensee:
1. Expansion into Foreign Markets: Licensing allows the licensor to expand its business into foreign markets without making substantial investments in manufacturing facilities or distribution networks.
2. Revenue Generation: The licensor earns revenue in the form of licensing fees or royalties from the licensee. This provides a passive income stream for the licensor.
3. Utilization of Intellectual Property: Licensing allows the licensor to utilize its intellectual property and establish its brand presence in foreign markets without directly engaging in manufacturing or distribution activities.
4. Lower Risk and Cost: Licensing reduces the risk and cost associated with setting up manufacturing facilities and distribution networks in foreign countries. The licensee bears the cost and risk of production and distribution.
5. Local Market Knowledge: The licensee, being a local manufacturer, possesses knowledge about the local market conditions, consumer preferences, and distribution channels. This helps in adapting the product to suit the local market needs.
Conclusion:
In licensing, the domestic manufacturer grants the right to use its intellectual property to a foreign manufacturer in exchange for a fee. This mode of entry allows the licensor to expand its business into foreign markets, generate revenue, and utilize its intellectual property without making substantial investments. It also provides the licensee with the opportunity to produce and sell products under a well-established brand name or trademark.
The correct answer is option 'B', which is licensing.
Mode of Entry:
Different modes of entry are used by companies to enter foreign markets. These modes of entry include:
- Exporting: Selling goods and services produced in one country to another country.
- Joint Venture: A partnership between a domestic company and a foreign company to create a new entity.
- Licensing: Granting permission to a foreign company to use intellectual property such as patents, trademarks, or copyrights for a fee.
- Contract Manufacturing: Outsourcing the production of goods to a foreign company.
Licensing:
Licensing is a mode of entry in which a domestic manufacturer gives the right to use its intellectual property, such as patents, trademarks, or copyrights, to a manufacturer in a foreign country for a fee. In this mode, the domestic manufacturer (licensor) grants permission to the foreign manufacturer (licensee) to produce and sell its products under its brand name or trademark.
Advantages of Licensing:
Licensing offers several advantages to both the licensor and the licensee:
1. Expansion into Foreign Markets: Licensing allows the licensor to expand its business into foreign markets without making substantial investments in manufacturing facilities or distribution networks.
2. Revenue Generation: The licensor earns revenue in the form of licensing fees or royalties from the licensee. This provides a passive income stream for the licensor.
3. Utilization of Intellectual Property: Licensing allows the licensor to utilize its intellectual property and establish its brand presence in foreign markets without directly engaging in manufacturing or distribution activities.
4. Lower Risk and Cost: Licensing reduces the risk and cost associated with setting up manufacturing facilities and distribution networks in foreign countries. The licensee bears the cost and risk of production and distribution.
5. Local Market Knowledge: The licensee, being a local manufacturer, possesses knowledge about the local market conditions, consumer preferences, and distribution channels. This helps in adapting the product to suit the local market needs.
Conclusion:
In licensing, the domestic manufacturer grants the right to use its intellectual property to a foreign manufacturer in exchange for a fee. This mode of entry allows the licensor to expand its business into foreign markets, generate revenue, and utilize its intellectual property without making substantial investments. It also provides the licensee with the opportunity to produce and sell products under a well-established brand name or trademark.
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This a MCQ (Multiple Choice Question) based practice test of Chapter 1...
I think answer must be Done as licensing is given for royalty and franchising is given for fee
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This a MCQ (Multiple Choice Question) based practice test of Chapter 10- International Business of Business Studies of Class XI (11) for the quick revision/preparation of School Board examinationsQ In which of the following modes of entry, does the domestic manufacturer give the right to use intellectual property such as patent and trademark to a manufacturer in a foreign country for a feea)Joint ventureb)Licensingc)Contract manufacturingd)None of theseCorrect answer is option 'B'. Can you explain this answer?
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This a MCQ (Multiple Choice Question) based practice test of Chapter 10- International Business of Business Studies of Class XI (11) for the quick revision/preparation of School Board examinationsQ In which of the following modes of entry, does the domestic manufacturer give the right to use intellectual property such as patent and trademark to a manufacturer in a foreign country for a feea)Joint ventureb)Licensingc)Contract manufacturingd)None of theseCorrect answer is option 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about This a MCQ (Multiple Choice Question) based practice test of Chapter 10- International Business of Business Studies of Class XI (11) for the quick revision/preparation of School Board examinationsQ In which of the following modes of entry, does the domestic manufacturer give the right to use intellectual property such as patent and trademark to a manufacturer in a foreign country for a feea)Joint ventureb)Licensingc)Contract manufacturingd)None of theseCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for This a MCQ (Multiple Choice Question) based practice test of Chapter 10- International Business of Business Studies of Class XI (11) for the quick revision/preparation of School Board examinationsQ In which of the following modes of entry, does the domestic manufacturer give the right to use intellectual property such as patent and trademark to a manufacturer in a foreign country for a feea)Joint ventureb)Licensingc)Contract manufacturingd)None of theseCorrect answer is option 'B'. Can you explain this answer?.
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