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Foreign direct investment, joint ventures, licensing, and turnkey contracts are common methods for companies to conduct business internationally or transfer technology to other countries. A joint venture involves two or more companies collaborating on a particular business venture by sharing assets, management, risks and profits. Licensing involves a company permitting another to use its intellectual property, like patents or trademarks, in a certain area for a set time period. A turnkey contract sees a general contractor take full responsibility for executing an entire project from design to completion for the client.
Foreign direct investment, joint ventures, licensing, and turnkey contracts are common methods for companies to conduct business internationally or transfer technology to other countries. A joint venture involves two or more companies collaborating on a particular business venture by sharing assets, management, risks and profits. Licensing involves a company permitting another to use its intellectual property, like patents or trademarks, in a certain area for a set time period. A turnkey contract sees a general contractor take full responsibility for executing an entire project from design to completion for the client.
Foreign direct investment, joint ventures, licensing, and turnkey contracts are common methods for companies to conduct business internationally or transfer technology to other countries. A joint venture involves two or more companies collaborating on a particular business venture by sharing assets, management, risks and profits. Licensing involves a company permitting another to use its intellectual property, like patents or trademarks, in a certain area for a set time period. A turnkey contract sees a general contractor take full responsibility for executing an entire project from design to completion for the client.
Definition Generally, a An agreement An agreement General
foreign concluded under which the contractor is company between two or owner of a responsible for invests in more companies patent, all the developing in order to trademark or procedures countries in execute a other related to order to create a particular intellectual technology new market, business. The property gives transfer, such as remove export joint venture permission to technology barriers and get implies mutual another design, an access to assets, company to use financing, cheap labor. management, the technology equipment risks, profit developed by supply, sharing, co- him (her), in a construction and production, certain area commissioning services and during a certain marketing. period of time. Advantages It provides local Long-term Buying a The company economic cooperation license/patent is concludes a benefits in between the that it has lower contract only multiple parties, costs with one locations. motivation of all supplier who participants in takes full the successful responsibility transfer, lower for the project costs than if the execution. companies have been working separately. Disadvantages It stops Companies are The licensee Turnkey project domestic not always able may have made is that owing to investments to determine a financial the lack of from happening objectively the commitment for authority the and can be value of capital a technology owner has over costly. contributed by that is not 'ready' construction and each of them to be design and, therefore, commercially decisions, the subsequent exploited, or project may not profits that must be be ideally suited distribution modified to to his meet the requirements on licensee's completion. business needs. Example Business Malaysia Mc Donald use a contract in expands its company enters lisencing to give which Honda domestic into a joint permission for company, operations to a venture with a Mc Donald established in foreign country. U.S. company restaurant in Japan give full In this case, the for sale of its Malaysia to responsibility to business product. The produce their plan and build conducts the Malaysia fast food their car in same activities company then product. Malaysia that but in a foreign benefits from Malaysia can must be able to country. For the domestic develop and use as soon as it example, company’s produce the is finished McDonald’s governmental product that suit without needing opening approval and with Malaysia to do any restaurants in business culture. further work on Japan would be relationships in it themselves. considered as the industry. FDI. The restaurant in Japan will produce product that that suitable for Japan people like rice and so on.