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Consulting Case Interview Practice Questions

Category - Strategy

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What is an advantage of using licensing as a method of global expansion?
  1. Profits are shared equally.
  2. There are always no establishment costs.
  3. There are high levels of direct control.
  4. Low levels of investment are required.
  5. All of the above.
Explanation
Answer: d - Licensing means far lower R&D costs. The other options are not always true.

Key Takeaway: Licensing is a good strategy for companies that have strong distribution channels, but are not good at executing on innovation-based R&D.
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