Why Choose Licensing?
Licensing is attractive because
the firm avoids development costs and risks associated with opening a foreign market
the firm avoids barriers to investment
the firm can capitalize on market opportunities without developing those applications itself
Licensing is unattractive because
the firm doesn't have the tight control required for realizing experience curve and location economies
the firm’s ability to coordinate strategic moves across countries is limited
proprietary (or intangible) assets could be lost
to reduce this risk, firms can use cross-licensing agreements