Answered: Which of the following entails the…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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Question

Which of the following entails the greatest amount of commitment from the parent company?

International licenses

There is very little difference based on how a company reaches international differences

Contract manufacturing

International franchises

Expert Solution

Step 1

In the given question, what we can comprehend is we need to find what is inevitably necessary involvement or commitment that comes with Parent Company. We will be approaching the question by defining each of the terminology and later analyzing whether it holds true in regards with the given conditions or not.

Definitions:

Parent Company: A parent company is the main governing company that is usually a single entity, under which multiple companies operate, usually those branch companies together form combinedly as the parent company either when they spin-off, or produce new subsidiaries or by performing acquisitions or merger.
International License: An international business licensing usually means an agreement that involves two firms/organizations from different countries or continents, with the licensee receiving the rights and/or resources to manufacture in the foreign country (Provider's country). Usually those rights and/or resources include patents, copyrights, technology, managerial skills, and other factors necessary for manufacturing the good.
There is very little difference based on how a company reaches international differences, is a claim or supposition which is expected in terms of parent company commitments and perks.
Contract Manufacturing: A contract manufacturing is a contract which allows firms to deal with coordinating firms for components or products. It is basically a form of outsourcing.
International Franchises: A system based on the licensing enables right to duplicate a successful business format in foreign markets. Which in other words means that any specific local entity who signed the accord with the business can legally open their branch or an outlet in their locality or region abroad (across the national border of the main business’s origin country) and sell their products or services under the guidance, surveillance and agreement of the main business.