Which of the Following Is a Drawback of Licensing as a Mode

question 103

Multiple Choice

Which of the following is a drawback of licensing as a mode of entry into foreign markets?

• A)The licensor has to bear all costs and risks associated with developing a foreign market.
• B)Licensing does not give a firm tight control over manufacturing,marketing,and strategy.
• C)Licensing does not benefit firms lacking the capital to expand operations overseas.
• D)Licensing deals fail when there are barriers to foreign investment in a particular country.
• E)A firm that enters into a licensing deal with a foreign country will have no long-term interest in that country.

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Definitions:

Operating Segments

Components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance.

Generating Revenue

This term refers to the process by which a business earns income through the sale of goods, provision of services, or other financial operations.

Financial Reporting System

A structured process or framework used by an entity to compile and present financial data in the form of financial statements.

Segment Information

Financial data that has been broken down into smaller parts, such as divisions or subsidiaries of a corporation, to analyze performance of different areas of the company separately.