You are the international manager of a U.S business that has just developed a revolutionary new personal computer than can perform the same functions as existing PC’s but costs only half as much to manufacture. Several patents protect the unique design of this computer. Your CEO has asked you to formulate a recommendation for how to expand into Western Europe.

Your options are

a) To export from the United States;

b) To license a European firm to manufacture and market the computer in Europe; or

c) To set up a wholly owned subsidiary in Europe.

Evaluate pros and cons of each alternative and suggest a course of action to your CEO.

ANSWER

First and foremost, before answering the question, we must understand on the question mentioned on …show more content…

This leads to more transparency. The vendor is in duty to follow the real-time demand and to submit all transaction details. • Management mistakes: The management might tap in some of the organizational pitfalls, like poor selection of oversea agents or distributors or chaotic global organization.

b. To license a European firm to manufacture and market the computer in Europe

After looking on the export mechanism that pros and cons in exporting the new patent PC’s from United States to Western Europe. Another alternative that we look is by giving a license to a European firm to manufacture and by than can market the computer in Europe.

Prior to this, we should understand also on the definition of licensing, as per courted by Wikipedia founder Jimmy Wales in his web mentioned that “The verb license or grant license means to give permission. The noun license (American English) or license (Indian English, British English, Canadian English, Australian English) refers to that permission as well as to the document recording that permission.” A license may be granted by a party ("licensor") to another party ("licensee") as an element of an agreement between those parties. A shorthand definition of a license is "an authorization (by the licensor) to use the licensed material (by the licensee)." After understand on