Licensing seems to be a fairly safe way for a manufacturer to produce in a foreign market for the first time. Comment.

Licensing is a common method of international market entry for companies with a distinctive and legally protected asset. It involves a contractual arrangement whereby a company licenses the rights to certain technological know-how, design, patents, trademarks and intellectual property to a foreign company in return for royalties or other kinds of payment. "Licensing seems to be a fairly safe way for a manufacturer to produce in a foreign market for the first time." This seems to be true to some extent as Licensing is widely considered as another form of "safe" market penetration as it Builds and strengthens the brand image beyond traditional boundaries without much involvement of the brand owner and still builds brand value. It is also a safer avenue for the customers in foreign country to acquire authorized rather than illegal or unauthorized products using the brand name, marks and logo. It also generates additional revenue through venturing in foreign country while protecting the trade marks.