Licensing vs Exporting: Which is the Best mode for Business?

Licensing vs Exporting: Which is the Best mode for Business?
August 10, 2019
Author : Charles Hill

International marketers use various modes of entry to capture foreign markets. Hence, licensing and exporting form two very important concepts for International marketing and management students. It is therefore very essential to understand and be able to differentiate between the two entry modes.

Let me take you through a short journey where I discuss which strategy is the most-chosen by businesses around the world

What is Exporting?

Exporting is direct selling of products to the end customers in the foreign company or may also include indirect exports where an intermediary acts as the agent of selling. This helps the company to take advantage of local knowledge and networks of the intermediaries which helps in developing a close relationship with the consumer. Some common forms of direct exporting are E-commerce and through local exporters. Some disadvantages, however, include trade barriers and tariff controls, cost of transportation and exchange rate fluctuations which can hamper the cost and have a subsequent effect on the potential revenue. It must be noted that however, the risk in exporting is less it is the least financially rewarding mode of entry.

What is Licensing?

In licensing, the company chooses another party of the host country to use its intellectual property in return for a licensing fee. It is mostly done by giving permission to the second party to use the name of the company and manufacture as well as sell its products. Franchising is a form of licensing where the second party sets up stores in the name of the company. This method allows to create a revenue stream and capture a strong market in little time and monetary investment. However, it is important to have strong control over the licensee, and there is always a risk of the brand image due to the unsatisfactory operations of the licensee.

Factors to choose the correct strategy

A successful market entry strategy must be chosen after considering the following questions:

  • Does the product need localization? Do we need a completely new product?
  • Does the market know about our company and products?
  • Which part of the country or rather which country is being targeted? What are the trade regulations of the place?
  • What is the best time to venture? Do we get a first-mover advantage?
  • Which is the most financially viable option? How much risk is associated?

All international marketing courses focus on enabling the students to understand the global market scenario and thereby be equipped to plan strategies. Therefore, the assignments would also focus on the same. Majority of the assignments would be in terms of planning and developing cases where the end result must explain why the strategy was chosen along with proper facts and supporting literature. It may also include market research techniques. These assignments are majorly practical in nature and therefore, require an in-depth knowledge of the topics and clarity of concepts. It, therefore, becomes crucial for the students to have a clarity of terminologies and understanding of advantages and disadvantages in order to excel and achieve HD grades in the course and the subject.

Now, here’s an easier way to score well in International Business unit!

Assignment assistance at your doorstep is as simple as it sounds. You can call, message, or even drop a mail to us. But the simplest way is to fill the order now form here. Whether you are stuck in your assignment or are unable to do it because of a shortage of time, complex questions, lack of credible sources for references, then our international business assignment help team will be of great value to you. To be honest with you, this team has a customer satisfaction rate of 94% on every assignment that they have submitted in the past five years. That’s incredible!

So, if you’re paying a hundred dollars to an external expert, then why not pay it to someone who really has that caliber and experience?!

Get in touch with My Assignment Services today and you’ll have the support of our entire team.

Loved reading this Blog? Share your valuable thoughts in the comment section.

Add comment

About the Author

Charles Hill

Charles writes blogs and articles for students who are facing problems with their management assignments. His articles have been featured on several websites. He has contributed to the academic enhancement of students from the University of New South Wales, Central Queensland University, Edith Cowan University, etc. He joined the team of My Assignment Services as a consulting expert and now is a full-time academic help provider. His expertise in the field of management covers topics like leadership management, human resource management, business management and several others. His blogs focus on solving the most complex of the queries and simplifying the processes.

RELATED POSTS

0 Comment

Order Now

Request Callback

Get 500 Words FREE
Ask your Question
question next-1 next calendar paper favorite employee start-button customer-service book user board essay dissertation momentum microscope contract-1 australia checklist laptop support mobile-app secret digital-marketing bitcoin forex satisfaction electronics file signing check shapes-and-symbols search null social good management design business education technology business-1 man healthcare-and-medical flasks bars-chart building file-1 business-and-finance file-2 man-1 point-to directional sale copyright medal contract conversation student survey thesis research pencil exam apple android facebook twitter instagram linkedin youtube gps close upload article recruitment reference click phone copyright-guidelines analyze consulting call content checked time certified graduate draft innovation requirement video-1 tips video idea assignment phoneMail location star quote star-e clock scissors