Studying the presence of international markets
The presence in international markets for companies requires certain criteria, and among them are collaboration agreements. Why do agreements use to enter global markets? A consequence of market globalization has been the growing incidence of collaborative companies between companies from different countries. Small and large, experienced and novice, companies are increasingforeign that agents and concessionaires and obtain knowledge from foreign partners. as a way to compete in the global market. Some collaboration agreements include licensing, joint companies, mixed alliances, direct foreign investment and indirect exports. The quantity and proportion of the resources provided by foreign markets will be key in the way that companies can have a presence internationally.
A license agreement is a legal contract between two parties, known as the Licenseor and the licensee. In a typical license agreement, the Licensee grants the licensee the right to produce and sell products, to apply a trademark or trademark name, or to the use of patented technology owned by the license. As indicated online, in the license agreements, the exporter receives a more continuous payments (royalties) that are calculated as a percentage of the sales holder’s sales. Licenses are used by brand owners to extend a brand or character to products of a totally different nature. A license agreement authorizes a company that markets a product or service to lease or rent a brand to the owner of a brand that operates a licensing program.
A more common form of licenses are franchises. Examples of some franchises are McDonald’s, Taco Bell, Subway and for the El Marriot hotel, Holiday Inn and Hampton by Hilton among others. A franchise is a type of license that a part acquires to allow you to have access to the knowledge, processes and registered trademarks of a company to allow the party to sell a product or provide a service under the business name. Franchises are a very popular method for people to start a business, especially for those who are interested in participating in a highly competitive industry such as fast food industry. One of the greatest advantages of investing in a franchise is that you have a company with a recognized brand name. On the other hand, the disadvantage is at high investment costs required by the purchase of a franchise and continuous royalty costs. In the United States, state laws are those that regulate franchises.
Joint companies or joints are two or more companies that combine their experience, technologies or resources to achieve a particular objective. What types of joint-venture exist? Derived from the commercial practices applied in the North American market, the joint company involves a contractual form between both organizations. In practice, the joint business adopts a contractual form, through the conclusion of a collaboration agreement, a corporate form, by creating a joint entity, or both forms mentioned above. There are minimal conditions that allow the activities of a joint company to be successful during the initial stage and meet its objectives.
For vouchers Llaneza, García Ruiz (2001-2018):
An empirical analysis of 87 experiences of Spanish companies in the creation of joint companies has confirmed that the probability that partners can achieve their objectives increases when any of the following contingencies attend: two partners participate exclusively, these are not direct competitors, there are relationshipsprevious cooperatives between them or the manager participates in capital.
A strategic alliance is a relationship between two or more entities that agree to share resources to achieve a mutually beneficial objective. A strategic alliance is less involved and is less binding than a joint business, in which two companies generally combine resources to create a separate commercial entity. For example, in a strategic alliance, company A and company B combine their respective resources, capacities and basic competences to generate mutual interests in the design, manufacture or distribution of goods or services. There are three types of mixed alliances, these are: joint companies, strategic alliances of equity and non -equitable mixed alliances. The joint company is when the parent company establishes a new company, in the mixed alliance it is when a company buys a certain percentage of actions and strategic alliances without equity is when two more companies decide to sign a contract agreement to unify resources andcapacities. The reasons for strategic alliances vary between the product’s life cycle and the need to innovate and create products for the industry.
What is foreign direct investment (FDI)? IED is one carried out by natural or legal not residents in the country where the investment is carried out, which can be made through the purchase of shares or participations of a company established or constituted in the country with the intention of permanence. Foreign direct investment (FDI) plays an extraordinary and growing role in global businesses. There are three types of FDI, the share capital is defined as the purchase of shares of a company in the country of the foreign direct investor, the profits converted into new investments include profits that are not obtained by the direct foreign investor and internal debts in theorganization means that they are short or long -term debt funds between direct investors and linked companies in question. The importance of foreign direct investment is that there is a strong relationship between foreign investment and economic growth. Higher foreign investment flows are needed so that the country achieves a high sustainable trajectory of economic growth.
Indirect export allows small and medium enterprises to be suppliers of larger local companies than if they export to compete in the global market. A direct distribution channel is organized and managed by the company itself. An indirect distribution channel is based on intermediaries to perform the majority or all distribution functions, also known as wholesale distribution. Companies that use direct distribution require their own logistics equipment and transport vehicles. It is for this reason, that small and medium enterprises use the indirect export method to cover the high costs of procedures and processes that it entails exporting one product to another country.
To conclude, the factors that make the collaboration agreements succeed or fail can vary depending on the process they use and the relationships established in the initial stage. The reasons for international collaborative companies are varied and complex, including the desire to take advantage of resources and assets, conserve flexibility, reduce risks, gain speed and capitalize the strengths of each partner. Mutual collaboration is key for agreements to succeed, since both parties must know the objectives and needs of all involved to establish better negotiation processes. On the other hand, collaboration agreements require investors and companies to train the laws, policies and culture of the foreign country to establish a successful business. Good collaboration is based on solid relationships and trust. Companies can benefit in many ways by collaborating with others, from the expansion of networks and knowledge, to access to new groups of talents, techniques, processes and financing, a potential increase in productivity, faster growth and agreater global reach.
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