An Indian consumer appliances company has developed a multi-functioning 'Torch Light' at a cheaper price and having a good market share due to its technology. A survey conducted by the company shows that torch is having

Licensing would be the most suitable method for this consumer appliances company. International licensing is an agreement between the licensor and the licensee over a period of time for the use of brand name, marketing knowhow, copyright, work method, and trade mark by paying a license fee. The licensor has minimum involvement in day to day functions. Therefore, the returns are also comparatively low. The domestic company can choose any international location and enjoy the advantages without incurring any obligations and responsibilities of ownership, managerial, investment etc. Licensing gives the following advantages: Good way to start in foreign operations and open the door to low risk manufacturing relationships It brings new technology and know-how in the licensees' country. Linkage of parent and receiving partner interests means both get most out of marketing effort Capital not tied up in foreign operation and Options to buy into partner exist or provision to take royalties in stock.