According to Internalization Theory,licensing Has Three Major Drawbacks as a Strategy

question 73

Multiple Choice

According to internalization theory,licensing has three major drawbacks as a strategy for exploiting foreign market opportunities.Each of the following is a drawback of licensing except:

• A) licensing may result in a firm's giving away valuable technological know-how to a potential foreign competitor.
• B) licensing does not give a firm the tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.
• C) licensing helps a firm avoid making a direct foreign investment in a foreign country.
• D) when a firm's competitive advantage is based not so much on its products as on the management, marketing, and manufacturing capabilities that produce those produces, licensing fails to capture those advantages.
• E) none of these answers is correct.

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Definitions:

Berlin

The capital and largest city of Germany, known for its historical significance, cultural heritage, and as a center of political power and innovation.

Soviet Zone

The area of Eastern Europe that was under the influence and control of the Soviet Union after World War II, including parts of Germany, Poland, and other countries.

Josip Broz

Commonly known as Tito, a Yugoslav communist revolutionary and statesman who served as the Prime Minister and later President of Yugoslavia.

Communist Government

A form of government where the state owns and controls the major means of production and there is no private property, aiming to achieve a classless society.