What Type of Business Strategy Is Licensing for a Licensor

The art licensing community is relatively small and fragmented compared to other major categories of licensed real estate. Art licenses include everything from individual artists supporting their artistic endeavors through licenses to established companies creating art and design specifically to decorate a wide range of products, including prints, home textiles, home textiles©, publishing apparel, gift items, clothing – literally any product whose appeal can be enhanced by an attractive or evocative image. Design or pattern. Today, art licenses are an extremely important segment of the global licensing industry due to their timelessness, ability to cater to specific niches, year-round profit potential, and moderate cost. This is very attractive for companies that are new to international trade. On the other hand, international licensing is a mode of entry into the foreign market that has certain disadvantages and reasons why companies should not use it, because there are some: Companies with the strategic objective of increasing their market share should consider obtaining a license if they have an exclusive product that can easily be manufactured in a foreign location. Licensing offers the opportunity to quickly increase the sales volume of a product. However, this increase does not lead to significant profits, since yields are limited to a percentage of each unit of product sold. A popular restaurant chain that allows a frozen food manufacturer to market a range of appetizers under their brand. Licensors often hire licensing agents to manage their licensing programs.

These agents take on tasks for their customers, such as contract negotiations or product approval processes. In return, the agent receives a certain percentage of all license revenue. For the licensor, the advantage of retaining a licensing agent is the agent`s expertise and network of contacts. The licensor also weighs the agent`s costs against the cost and time required to set up an internal licensing service to run the business. Since this type of market launch strongly represents the transfer of knowledge between the parent company and the licensee, the decision to enter into an international licensing agreement depends on the respect that the host government has for intellectual property and the licensor`s ability to select the right partners and avoid competition in each other`s market. Licensing is a relatively flexible work regime that can be tailored to the needs and interests of both the licensor and the licensee. Here are the main advantages and reasons for using international licenses for international expansion: The properties that can be licensed come from a variety of sources. Definitions of different types of properties are not always clear and often overlap. Although each licensing program is unique, different sectors of the licensing business have specific models in terms of organization and conduct of business. The scope and sophistication of sports licenses has increased over the past decade and is one of the four largest revenue producers in the world of licenses. In the United States, business is dominated by the four major sports leagues — the National Football League, Major League Baseball, the National Basketball Association, and the National Hockey League — as well as NASCAR.

Each of these leagues operates the licensing business on behalf of its teams from a central league office. Other important licensing campaigns involve smaller professional sports leagues (e.g. B, Major League Soccer, Major League Soccer, Minor League Baseball), organizations such as the United States. The Olympic Committee and the National Collegiate Athletic Association (NCAA), as well as major sporting events such as the Olympic Games and the World Cup. In addition, more than 300 colleges and universities in the United States are involved in licensing colleges and market their rights primarily in the apparel market with sometimes very respectable revenues, depending on the performance of their sports teams and the size of the university or college. In summary, in this mode of entry into the foreign market, a licensor in the country of origin provides limited rights or resources to the licensee in the host country. Rights or resources may include patents, trademarks, management skills, technologies and others that may enable Licensee to manufacture and sell in the host country a similar product that Licensor has already produced and sold in its home country without requiring Licensor to open a new operation abroad. Licensor`s revenues generally take the form of one-time payments, technical fees and royalties, which are usually calculated as a percentage of sales. The owner of an IP must also be aware of the risks associated with licensing.

The trademark owner must ensure that it enters into an agreement with a licensee who can create and deliver products with the licensor`s trademark that are of agreed quality; who can adequately serve the retailer; whose goals for the brand coincide with those of the brand owner and who can serve as a true partner in a relationship that, if executed well, is a win-win offer for all parties involved. .