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The Strategy of using Foreign Investors and

Licensees
*COMPANY GOALS
I. Potential Benefits

1. Patent
right
or
Manufacturing
rights

the right granted by a patent.


Especially an exclusive right to
an invention.
2. Trademark a recognizable
sign, design, or expression
which identifies products or
services.
3. Technical service agreement
Help
in
design
and
construction of the plants
Provide training for the
companys
skilled
workers, etc.
Help in product redesign
Help
in
technical
advertising
Provide full-time or parttime
production
engineers
4. Management contract
5. Access to foreign marketing
channel
6. Additional
capital
investment
7. Protection from nationalism
8. Investment in a foreign joint

is related to its view of the risk


involved.

II. Specific Goals


1.
Undertake
local
manufacturing
so
as
to
penetrate local markets
2.
Set up a manufacturing
base on the Philippines

III.Factors why foreign investors


are in favor of licensing

a. Extra income
b. Spread
research
and
development cost
c. Retain establish markets and
reach new one
d. Pave
way
for
future
investment
e. Safeguard
against
infringement of patents
f. Possible acquire reciprocal
benefits in technical know-how
from the Philippine partner.

IV. Factors why foreign investors


are against licensing
a. They have a 100% policy or
majority equity investment
b. They fear that they are
helping
to
establish
a
competitor
c. They fear loss of goodwill if
the licensee does not maintain
quality standard
d. They have the organization
and resources for a direct
investment.

venture

II. Potential Problems


1. Loss of control
2. Disagreements

*POINT OF VIEW OF FOREIGN


COMPANY
I. General Concern:

reasonable
return on its investments. The rate of
return that it will want on investment
1

* POINT OF
GOVERNMENT

Michael John Natabla| Gracel Joy Saturno

VIEW

OF

THE

The Strategy of using Foreign Investors and


Licensees
1. Balance of payment effect
2. Economic development effect
3. Political effect

* USE OF STRATEGY
I. Types of strategy
a. Strategy

for

type

of

business
1. Product range
2. Size
3. Extent
of
international
operations
4. Nationality
b. Ownership strategy
1. A joint venture with majority
ownership by the Philippine
firm

2. A joint venture with 50-50


split on stock ownership
3. A joint venture with minority
Philippine ownership
4. License
agreements
or
management contract with
no
foreign
equity
participation
5. A joint venture agreement
with
initial
minority
Philippine ownership
6. A joint venture with a
foreign company and the
International
Finance
Corporation
7. A joint venture with a
foreign company and a local
development bank
c. Control Strategy
d. Manufacturing strategy
e. Marketing strategy

Michael John Natabla| Gracel Joy Saturno