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Market research may reveal that it is impossible to export your product to a foreign country because of import barriers, low-priced foreign competition, transportation costs, high production costs, etc. The possibility of licensing a local firm to manufacture and market your product within that market, paying you a royalty for each unit locally manufactured. Or you may wish to consider a joint venture with a local firm and enter into partnership to manufacture and market the product together. Such agreements usually involve the use of the exporter's trademarks, patents technical know-how, specialized equipment, training, etc. and the local partner's buildings, labor force, permits, contacts, etc. The advantage of licensing or a joint venture
The disadvantages are that: 1. It may be difficult to find a suitable local firm. 2. You may lose control of your technical "know-how". 3. Your local partner may not fulfill his part of the agreement. 4. The licenses may become an eventual competitor. |
Secrets of International Trading APEC The EEC InCoTerms 2000 How to manage Export Promotion? How to Draft and Agency Agreement? Export Trade Barriers & Trade Blocks
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