Licensing proprietary technology to foreign competitors is the best way to give up a firm's competitive advantage-I agree with this statement
Explanation:
when a licensing arrangement is structured in such a way that ir reduces the risks of a firm's technological know-how being expropriated by licensees, then licensing may be said to be appropiate.
For example : when a firm perceives its technological advantage can be intimated by its competitor ,in such case the company gets its technology licensed before the imitation of its technology occur.By doing so the firm may deter its competitors from developing their own, possibly superior, technology. And by licensing its technology the firm may be able to establish its technology as the dominant design in the industry. In turn, this may ensure a steady stream of royalty payments.
so we can say that Licensing proprietary technology to foreign competitors is the best way to give up a firm's competitive advantage-I agree with this statement
It is necessary to weigh the advantages and disadvantages of licensing proprietary technology to foreign competitors in order to form a consistent opinion.
For an organization that owns the rights to a certain technology, licensing to other companies may not be a good strategy to gain competitive advantage, as innovation is an essential characteristic for organizational success.
Therefore, technology licensing can be advantageous if an organization has its structure and objectives aligned with providing know-how to other companies, such as a franchise network for example.
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