Question 1

In typical licensing agreements, the licensee compensates the licensor with a down-payment plus ongoing royalties based on sales.

Accepted Answer

A) True 
 B)False

Question 2

Where counterfeiting and piracy are commonplace, companies are reluctant to invent, innovate, and market legitimate products, which reduces consumer choices and ultimately lowers living standards.

Accepted Answer

A) True 
 B)False

Question 3

Compare and contrast licensing and franchising as foreign market entry strategies. Why is franchising a more comprehensive strategy?

Accepted Answer

A licensing agreement specifies the natu...

Question 4

An advantage of licensing is that firms are able to ________.

Accepted Answer

A)  enter markets with extensive trade barriers
B)  guarantee a basis for future expansion
C)  control how the licensed asset is used
D)  resolve disputes easilyE) A) and B)
F) C) and D)

Question 5

Which of the following is provided by the licensor in a licensing agreement?

Accepted Answer

A)  a monetary down-payment plus royalties for all products sold locally
B)  a combination of intellectual property and technical information and assistance
C)  a storefront or facility and the necessary materials to make the product
D)  a combination of a lump-sum payment and the intellectual know-howE) All of the above
F) A) and B)

Question 6

When compared to licensing agreements, the relationships established in franchising arrangements are typically volatile and short-term.

Accepted Answer

A) True 
 B)False

Question 7

What is cross-licensing? Why does the pharmaceutical industry tend to favor cross-licensing arrangements? Explain your answer in a short essay.

Accepted Answer

In some industries, such as pharmaceutic...

Question 8

Which of the following statements is true of leasing?

Accepted Answer

A)  It is an arrangement in which a contractor supplies managerial know-how to operate a hotel, hospital, airport, or other facility in exchange for compensation.
B)  The lessor transfers ownership of the property in exchange for a lump-sum payment.
C)  It is a high-risk and high-cost method of entering a foreign market.
D)  A major advantage for the focal firm is the ability to gain quick access to target markets, while putting assets to use in earning profits.E) None of the above
F) A) and B)

Question 9

Professional service firms, such as PriceWaterhouseCooper, often enter large international markets through FDI but usually use ________ to enter small markets.

Accepted Answer

A)  equity-based collaborative ventures
B)  affiliates
C)  BOT arrangement
D)  turnkey contractingE) None of the above
F) A) and B)

Question 10

Contractor A would most likely oversee each of the following EXCEPT ________.

Accepted Answer

A)  designing the bridge
B)  operating the subway system continuously
C)  engineering the bridge
D)  constructing the subway systemE) None of the above
F) A) and B)

Question 11

Which of the following is an example of franchising?

Accepted Answer

A)  An Italian clothing company opens manufacturing factories in China and Bangladesh to reduce manufacturing costs.
B)  A U.S-based quick-service restaurant gives rights to another business to use its entire business system in exchange for compensation and royalties.
C)  A U.S.-based animation company allows factories in China to use their famous cartoon character on mugs and stationery.
D)  A Germany automobile manufacturer opens an office in Philippines for its customer care operations.E) A) and B)
F) None of the above

Question 12

In a licensing agreement, the licensee provides ________.

Accepted Answer

A)  the rights to use its industrial design
B)  intellectual property, technical information and assistance
C)  a combination of down-payment plus royalty
D)  the know-how and supporting products such as, raw materials and componentsE) None of the above
F) All of the above

Question 13

In a system franchising agreement, the franchisor provides ________.

Accepted Answer

A)  down-payment plus royalty
B)  production and marketing methods
C)  lump-sum payment
D)  sale of related productsE) A) and B)
F) A) and C)

Question 14

The purpose of intellectual property rights is to ________.

Accepted Answer

A)  prevent excessive regulation and government bureaucracy
B)  grant a firm permission to use another firm's proprietary names
C)  allow inventors monopoly advantage for a specified period of time
D)  allow a firm to use an entire business system in exchange for compensationE) B) and C)
F) All of the above

Question 15

The greatest amount of licensing occurs in the ________ industries.

Accepted Answer

A)  pharmaceutical
B)  music
C)  toy
D)  miningE) A) and B)
F) C) and D)

Question 16

Which of the following is characteristic of cross-border contractual relationships?

Accepted Answer

A)  When compared to FDI, they are less susceptible to volatility and risk, and tend to bring both parties a predictable stream of revenue.
B)  The focal firm attains maximum control by establishing a physical presence, and ownership of key assets, in the foreign market.
C)  It attracts high attention and criticism for the focal firm because of the local perception of foreign entities.
D)  They are governed by a contract that provides the focal firm with no control over the foreign partner.E) All of the above
F) A) and D)

Question 17

Which of the following statements is true about international franchisors?

Accepted Answer

A)  Entry into numerous foreign markets is tough and costly.
B)  Maintaining control over franchisees is seldom difficult.
C)  Franchisors need to invest substantial capital.
D)  Franchisees may use franchise knowledge to start a competing business.E) A) and C)
F) None of the above

Question 18

Which of the following is an example of trademark licensing agreement?

Accepted Answer

A)  a China based consumer electronic company that has invented a flexible casing for its MP3 players
B)  a Thailand-based pharmaceutical company that receives manufacturing knowledge from a U.S-based pharmaceutical
C)  a U.K.-based cosmetics manufacturer that is allowed to use an American cosmetics manufacturing firm's logo for its new line of "Titanium" makeup products
D)  a U.S.-based clothing company that opens a factory in Vietnam and Cambodia to utilize low-labor costsE) B) and C)
F) None of the above

Question 19

Which of the following most likely supports Azoo government's decision to award the project bid to Contractor A?

Accepted Answer

A)  Azoo leaders want immediate ownership of the public projects.
B)  Azoo leaders want long-term help with operation of the subway.
C)  Azoo lacks qualified workers to maintain public works projects.
D)  Azoo lacks the financial resources to purchase large machinery.E) A) and C)
F) A) and B)

Question 20

Which of the following is an example of intellectual property?

Accepted Answer

A)  systems of measurement
B)  Volkswagen's logo
C)  an unpublished book
D)  a phone directoryE) A) and B)
F) B) and C)

Exam 15: Licensing, Franchising, and Other Contractual Strategies

In a licensing agreement, the licensee provides ________.

Correct AnswerverifiedShow Answer

Which of the following most likely supports Azoo government's decision to award the project bid to Contractor A?

Correct AnswerverifiedShow Answer

When compared to licensing agreements, the relationships established in franchising arrangements are typically volatile and short-term.

Correct AnswerverifiedShow Answer

Which of the following statements is true about international franchisors?

Correct AnswerverifiedShow Answer

In a system franchising agreement, the franchisor provides ________.

Correct AnswerverifiedShow Answer

An advantage of licensing is that firms are able to ________.

Correct AnswerverifiedShow Answer

Contractor A would most likely oversee each of the following EXCEPT ________.

Correct AnswerverifiedShow Answer

Which of the following is provided by the licensor in a licensing agreement?

Correct AnswerverifiedShow Answer

In typical licensing agreements, the licensee compensates the licensor with a down-payment plus ongoing royalties based on sales.

Correct AnswerverifiedShow Answer

Professional service firms, such as PriceWaterhouseCooper, often enter large international markets through FDI but usually use ________ to enter small markets.

Correct AnswerverifiedShow Answer

The purpose of intellectual property rights is to ________.

Correct AnswerverifiedShow Answer

Which of the following is an example of trademark licensing agreement?

Correct AnswerverifiedShow Answer

Which of the following is an example of franchising?

Correct AnswerverifiedShow Answer

Which of the following is characteristic of cross-border contractual relationships?

Correct AnswerverifiedShow Answer

Which of the following statements is true of leasing?

Correct AnswerverifiedShow Answer

Compare and contrast licensing and franchising as foreign market entry strategies. Why is franchising a more comprehensive strategy?

Correct AnswerverifiedA licensing agreement specifies the natu...View AnswerShow Answer

Which of the following is an example of intellectual property?

Correct AnswerverifiedShow Answer

What is cross-licensing? Why does the pharmaceutical industry tend to favor cross-licensing arrangements? Explain your answer in a short essay.

Correct AnswerverifiedIn some industries, such as pharmaceutic...View AnswerShow Answer

Where counterfeiting and piracy are commonplace, companies are reluctant to invent, innovate, and market legitimate products, which reduces consumer choices and ultimately lowers living standards.

Correct AnswerverifiedShow Answer

The greatest amount of licensing occurs in the ________ industries.

Correct AnswerverifiedShow Answer

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A licensing agreement specifies the natu...
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In some industries, such as pharmaceutic...
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Correct Answer
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