According to the Internalization Theory,all of the Following Are Drawbacks

question 67

Multiple Choice

According to the internalization theory,all of the following are drawbacks of licensing as a strategy for exploiting foreign market opportunities except:

• A)licensing does not grant control over manufacturing,marketing,and strategy is granted to a licensee in return for a royalty fee.
• B)licensing may result in a firm's giving away its know-how to a potential foreign competitor.
• C)licensing does not give the firm the tight control over manufacturing,marketing,and strategy that may be required to profitably exploit its advantage.
• D)a firm's capabilities such as management,marketing,and manufacturing are often not amenable to licensing.

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Definitions:

Initial Equilibrium

The initial state of balance where the supply and demand curves intersect, determining the market price and quantity before any external changes.

Equilibrium Price

The market price at which the quantity of goods demanded is equal to the quantity of goods supplied.

Equilibrium Quantity

The quantity of goods or services supplied that is equal to the quantity demanded at the market equilibrium price.

Exert Pressure

Applying force or influence to achieve a specific outcome or change.