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:

Content Validity

The degree to which a test or measure reflects the entire range of material it is supposed to be testing.

Content Validity

The extent to which a test or questionnaire accurately covers or represents the specific content it aims to measure.

Construct Validity

The extent to which a test or instrument measures the theoretical construct it is intended to measure.

Criterion-related Validity

A measure of how well one variable or test predicts an outcome based on information from other variables.