edproducts through intermediaries or to the different types ofcapital involvement, which could be chosen as aninternational strategy. Many companies use intercompanylicenses to protect the intellectual property of the parentcompany that is held by the subsidiary, and to allow forpayments by the subsidiary to the parent of certain licensefees. Licensing is also dependent upon productcharacteristics. Products subject to rapid technologicalchange are also good licensing candidates. For most largecompanies licensing is designed as a means to entersecondary markets. The potential licensor must look atlegal and financial considerations. Many times the decisionto license has been made since the company has no otheralternative because the government restricts directinvestment through controls on foreign ownership orbecause it restricts the development of marketing networkby a number of tariff barriers. Licensing allows the licensorto enter into foreign markets with a low financial risk. Thedecision to license is a complex one. Many licensingrelationships do not succeed because the parties fail tounderstand each other’s agenda. The creation of joint ventures sometimes prevents all theproblems encountered by a company when going overseasfrom occurring. With the combined expertise and efforts oflocal and foreign firms, many problems will be eliminated.A joint venture is a partnership that is formed to achieve aspecific goal or to operate for a specific period of time.International corporations may enter into joint ventures.Most joint ventures were formed to share the extremelyhigh cost of exploring for offshore products. A companyshould create a joint venture only after giving it someconsideration. Many problems occur when company’s failto thoroughly investigate potential partners. Licensingdecisions are as difficult to analyze as those decisionsinvolving the creation of a joint venture. Failure to make thecorrect decisions at the righ...
