Which of the Following Is the Primary Disadvantage of Licensing

question 67

Multiple Choice

Which of the following is the primary disadvantage of licensing as a foreign market entry strategy?

• A) high transportation costs
• B) quality control
• C) It is usually a one-time activity.
• D) A firm loses partial control of its business operations.
• E) A firm in effect "teaches" a foreign company how to produce its proprietary products.

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Definitions:

Market Value

The market rate for buying or selling an asset or service currently.

Ownership

The state or fact of exclusive rights and control over property, which can be tangible or intangible.

Valuation Allowance

An accounting procedure that an entity might use against its deferred tax assets indicating that it is more likely than not that some portion or all of the asset will not be utilized.

Trading Investments

Assets held by a firm for the purpose of selling them in the short term to generate profit from price fluctuations.