Licensing

• What is licensing?

  Allowing a foreign firm to manufacture and sell your product in exchange for a fee or royalty
• What are the advantages of licensing?

  • Quick, low cost market entry
  • Avoids trade barriers
  • Access to local expertise
• What are the disadvantages of licensing?

  • Limited control over production quality, marketing and customer service
  • Brand can suffer from poor licensee practices
  • Lower profits
• When is licensing most suitable?

  • Markets with high entry barriers
  • When the business has a strong IP
• When is licensing not suitable?

  Where brand consistency and quality control are critical