The Advantages of Using a Licensing Strategy to Participate in Foreign

question 43

Multiple Choice

The advantages of using a licensing strategy to participate in foreign markets include:

• A) being especially well-suited to achieve scale economies.
• B) being able to charge lower prices than rivals.
• C) enabling a company to achieve first-mover advantages quickly and easily.
• D) being able to leverage the company's technical know-how,appealing brand,or patents without committing their resources or capabilities to foreign markets.
• E) being able to achieve higher product quality and better product performance than with an export strategy.

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Definitions:

Stock Investments

Financial assets consisting of shares in companies, representing ownership and possibly entitling the shareholder to dividends.

Debt Investments

Financial assets involving the loan of money by an investor to a borrower, typically with the expectation of receiving interest income in addition to principle repayment.

Equity Method

An accounting technique used to record investments in other companies, where the investment is accounted for based on the investor’s share of the investee's equity.

Stock Investments

Financial assets consisting of stakes in companies through the purchase of common or preferred stock shares, with the expectation of earning dividends or capital gains.