Which of the following is the primary disadvantage of licensing as a foreign market entry strategy?
A) A firm in effect "teaches" a foreign company how to produce its proprietary products.
B) High transportation costs
C) It is usually a one-time activity.
D) A firm loses partial control of its business operations.
E) Quality control

Question

Quizplus · Accepted Answer

Licensing involves granting a foreign company the rights to produce and sell a firm's products, which can lead to the foreign company learning how to produce the proprietary products themselves, potentially creating future competition.

Which of the Following Is the Primary Disadvantage of Licensing