Licensing – NBC Institute

AFM – Nov 2016 – L3 – Q2b – International investment and financing decisions

Compare the advantages and disadvantages of setting up a subsidiary versus licensing for KK Chemicals and suggest ways to mitigate blocked funds risk.

Question

KK Chemicals Ltd, an Accra-based manufacturer of paints, sells its products only in Ghana. Currently, the company wants to expand into other African countries. The directors are considering two options: setting up its own subsidiary company to manufacture and sell the products or licensing a company based in the host country to manufacture and sell the products.

Required:
i) Advise the directors on TWO potential advantages and TWO disadvantages to KK Chemicals of setting up its own subsidiary company to handle production and sale in the host country as against licensing a company in the host country. (4 marks)

ii) Suppose KK Chemicals elects to set up a subsidiary in the host country. Suggest to the directors TWO ways of dealing with the risk of blocked funds. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Foreign Direct Investment, International Expansion, Licensing, Risk Management, Subsidiary
Level: Level 3

Topic: International investment and financing decisions
Series: NOV 2016

AFM – May 2019 – L3 – Q1a – Economic environment for multinational organisations

Compare joint ventures and licensing for foreign expansion and explain five strategic reasons for a firm to engage in FDI.

Question

“Oil-rich Ghana’s sovereign wealth fund Ghana Development Board (GDB) has already invested in a number of real estate and infrastructure projects around the world, including a $2.5 billion joint venture with Petro Nigeria Ltd and a scheme to create a carbon-neutral city in Ghana”.

Required:

i) Compare the use of joint ventures as opposed to licensing for GDB if it wishes to expand abroad and outline the advantages and disadvantages of both joint ventures and licensing. (5 marks)

ii) Explain FIVE (5) strategic reasons for Foreign Direct Investment (FDI), for a firm wishing to expand. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Foreign Direct Investment (FDI), Foreign Expansion, Global Partnerships, Investment strategy, Joint Ventures, Licensing, Multinational Business

Topic: Economic environment for multinational organisations
Series: MAY 2019

AFM – Nov 2016 – L3 – Q2b – International investment and financing decisions

Compare the advantages and disadvantages of setting up a subsidiary versus licensing for KK Chemicals and suggest ways to mitigate blocked funds risk.

Question

ii) Suppose KK Chemicals elects to set up a subsidiary in the host country. Suggest to the directors TWO ways of dealing with the risk of blocked funds. (2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Foreign Direct Investment, International Expansion, Licensing, Risk Management, Subsidiary
Level: Level 3

Topic: International investment and financing decisions
Series: NOV 2016

AFM – May 2019 – L3 – Q1a – Economic environment for multinational organisations

Compare joint ventures and licensing for foreign expansion and explain five strategic reasons for a firm to engage in FDI.

Question

Required:

i) Compare the use of joint ventures as opposed to licensing for GDB if it wishes to expand abroad and outline the advantages and disadvantages of both joint ventures and licensing. (5 marks)

ii) Explain FIVE (5) strategic reasons for Foreign Direct Investment (FDI), for a firm wishing to expand. (5 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Foreign Direct Investment (FDI), Foreign Expansion, Global Partnerships, Investment strategy, Joint Ventures, Licensing, Multinational Business

Topic: Economic environment for multinational organisations
Series: MAY 2019

Question Tag: Licensing

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AFM – Nov 2016 – L3 – Q2b – International investment and financing decisions

Compare the advantages and disadvantages of setting up a subsidiary versus licensing for KK Chemicals and suggest ways to mitigate blocked funds risk.

AFM – May 2019 – L3 – Q1a – Economic environment for multinational organisations

Compare joint ventures and licensing for foreign expansion and explain five strategic reasons for a firm to engage in FDI.

AFM – Nov 2016 – L3 – Q2b – International investment and financing decisions

Compare the advantages and disadvantages of setting up a subsidiary versus licensing for KK Chemicals and suggest ways to mitigate blocked funds risk.

AFM – May 2019 – L3 – Q1a – Economic environment for multinational organisations

Compare joint ventures and licensing for foreign expansion and explain five strategic reasons for a firm to engage in FDI.

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Question Tag: Licensing

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AFM – Nov 2016 – L3 – Q2b – International investment and financing decisions

Compare the advantages and disadvantages of setting up a subsidiary versus licensing for KK Chemicals and suggest ways to mitigate blocked funds risk.

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AFM – May 2019 – L3 – Q1a – Economic environment for multinational organisations

Compare joint ventures and licensing for foreign expansion and explain five strategic reasons for a firm to engage in FDI.

You're reporting an error for "AFM – May 2019 – L3 – Q1a – Economic environment for multinational organisations"

AFM – Nov 2016 – L3 – Q2b – International investment and financing decisions

Compare the advantages and disadvantages of setting up a subsidiary versus licensing for KK Chemicals and suggest ways to mitigate blocked funds risk.

You're reporting an error for "AFM – Nov 2016 – L3 – Q2b – International investment and financing decisions"

AFM – May 2019 – L3 – Q1a – Economic environment for multinational organisations

Compare joint ventures and licensing for foreign expansion and explain five strategic reasons for a firm to engage in FDI.

You're reporting an error for "AFM – May 2019 – L3 – Q1a – Economic environment for multinational organisations"

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