Licensing and Franchising

Q.

In which of the following modes of entry, does the domestic manufacturer give the right to use intellectual property such as patent and trademark to a manufacturer in a foreign country for a fee:

1. Licensing

2. Contract manufacturing

3. Joint venture

4. None of these

Q.

What are the key factors to be considered before starting a new venture?

Q.

Which of the following is an advantage of licensing and franchising?

1. There is a lower risk of takeovers or interventions by the foreign government.

2. It enables international firms to produce goods on a large scale without investing in setting up production facilities.

3. Manufacture and assembly of products can be done cheaply by outsourcing to countries where costs of production are low.

4. There is minimal investment in foreign countries and hence the risk associated with foreign investments is also minimal.

Q. is a contractual arrangement in which one firm grant access to its trade secrets to another firm in a foreign country for a royalty.

1. Licensing
2. Franchising
3. Joint venture
4. External trade

Q. When there is a mutual exchange of technology or knowledge between two firms, it is called.

1. cross-licensing
2. licensing
3. franchising
4. partnership

Q. Compared to licensing, franchising is a more advantageous mode of entry because _______.

1. it offers greater control
2. it is a low-risk and a low-cost approach
3. all of the above
4. it generates economies of scale of operations

Q.

Licensing can cause severe competition.

1. False

2. True

Q.

When there is a mutual exchange of technology or knowledge between two firms, it is called ___

Q.

Which of the following facts statements is/are incorrect?

1. The top import sources for India are China, USA, UAE, and Saudi Arabia.

2. Licensing is a special form of franchising in which a parent company grants another independent entity the right to do business in a manner prescribed by the parent company.

1. Only statement 1 is incorrect

2. Both 1 and 2 are correct

3. Only statement 2 is incorrect

4. Statement 2 is correct but staement 1 is incorrect

Q. Advantage(s) to a franchiser in a franchise is/are _______.

1. risk sharing
2. capital injection
3. all of the above
4. market penetration

Q.

Only a minimal investment is required from the franchiser to enter the foreign market.

1. True

2. False

Q. The franchisee does not enjoy exclusive rights in his territory.

1. false
2. partly false
3. true
4. partly true

Q. Select the proper option from the options given below and rewrite the sentences.

________ is one of the modes of entry which requires high level of risks.

(a) Licensing
(b) Franchising
(c) Joint Ventures

Q. Mutual exchange of knowledge, technology and patent is known as ___________.

1. one man lisencing
2. penalty licensing
3. royalty licencing
4. cross- licensing

Q. Franchising enables the franchiser to increase his goodwill and reputation by expanding his network.

1. false
2. partly false
3. true
4. partly true

Q. Q:1 It is a public enterprise established under the Indian Companies Act and conducts business in competition with companies in private sector.
i) Identify the type of public enterprise highlighted above.
ii) What is the minimum investment government has to make in such companies.
iii) In whose name shares of this type of company are purchased.
iv) State any two merits and any one demerit of such type of company.
Q:2 Multinational companies establish themselves in developing countries to enjoy huge profits by selling consumer goods or luxury item. They start business by offering wide variety of goods at a cheaper prices than local retailers offer. But once they are established they increase prices.
Q:3 Identify the type of public sector enterprises in the following statements:
i) RBI and FCI are the examples of this form of enterprise.
ii) It enjoys maximum autonomy in all business decisions.
iii) These are established under an act of Parliament.
iv) Where national security is concerned, this form is most suitable.
v) This enterprise is financed directly from the government treasury.
vi) Indian Railways and Post and Telegraph are the examples of this form of enterprise.
vii) Minimum 51% of the paid up capital is held by the government.
viii) Hindustan Aircrafts is the example of this form of enterprise.
Q:4 Maharashtra Pharmaceuticals Ltd, registered under the companies Act, 1956, was started with a paid up capital of Rs 50, 00, 000. 40% of this paid up capital is in the hands of private individuals and balance is held by the government of Maharashtra. Maharashtra Pharmaceuticals Ltd belongs to which form of public sector enterprise. State its any two features and any two merits.
Q:5 ABC Ltd is a leading marketing company of soft drinks. Its 32% of total paid up capital is held by Central Government and 21% is by Delhi Government.
i) Identify the type of public sector enterprises in the above statement.
ii) State any four features of such an enterprise.

Q. Franchising is similar to licensing.

1. True
2. False

Q. State with reasons whether the following statements are True or False.

To avail the concessions of tariffs for goods coming from a particular county, Certificate of Origin is not required.

Q. Advantages to a franchisor in a franchise are _____________________.

1. capital injection
2. market penetration
3. risk sharing
4. all of the above

Q. In line with a franchising agreement, a franchisee may use ______.

1. geographic region exclusively
2. patents, designs, trade secrets and business know-how
3. trade marks, copyright and trade secrets
4. all of the above

Q. Select the proper option from the options given below and rewrite the sentences.

When both the countries enter into a mutual exchange of technology and patents, it is known as ________.

(a) Licensing
(b) Cross-licensing
(c) Contract Manufacturing

Q. In which of the following modes of entry, does the domestic manufacturer gives the right to use intellectual property such as patent and trademark to a manufacturer in a foreign country for a fee?

1. Franchising
2. Both (a) and (b)
3. Licensing
4. None of the above