The president of xyz manufacturing company of buffalo, new york, comes to you with a license offer from a company in osaka. in return for sharing the company's patents and know-how, the japanese company will pay a license fee of 5 percent of the ex-factory price of all products sold based on the u. s. company's license. the president wants your advice. what would you tell him?

If XYZ is a little maker with restricted worldwide experience, and if the image for both market and deals piece of the pie potential is promising, permitting can be an alluring section mode.

In any case, XYZ should cautiously think about the geographic extent of the understanding. Another worry for XYZ is that the licensee will turn into a more grounded contender once it has retained XYZ's skill. In general, supervisors can sanely permit as an essential passage mode just when they think about the average benefit of a proposed authorizing adventure with the normal gainfulness of elective section modes.