Global entry strategies

SBUMITTED BY
KARTHIKEYAN.K

09GSB021
 GLOBAL ENTRY STRATEGIES

The companies use different types of strategies for doing business from
one country to other country .The different types of global entry
strategies are
1. Licensing
2. Franchise
3. Management contracts
4. Turnkey operations
5. Joint venture
6. Equity alliance

LICENSING.

The verb license or grant license means to give permission. The noun
license 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)."
In particular a license may be issued by authorities, to allow an activity
that would otherwise be forbidden. It may require paying a fee and/or
proving a capability. The requirement may also serve to keep the
authorities informed on a type of activity, and to give them the
opportunity to set conditions and limitations.

INTELLECTUAL PROPERTY:

A license under intellectual property commonly has several component

parts beyond the grant itself, including a term, territory, renewal
provisions, and other limitations deemed vital to the licensor.

Term: many licenses are valid for a particular length of time. This
protects the licensor should the value of the license increase, or market
conditions change. It also preserves enforceability by ensuring that no
license extends beyond the term of IP ownership.

Territory: a license may stipulate what territory the rights pertain to.
For example, a license with a territory limited to "North America"
(United States/Canada) would not permit a licensee any protection from
actions for use in Japan.

TRADEMARK AND BRAND LICENSING:

A licensor may grant permission to a licensee to distribute products
under a trademark. With such a license, the licensee may use the
trademark without fear of a claim of trademark infringement by the
licensor.

ARTWORK AND CHARACTER LICENSING:

A licensor may grant a permission to a licensee to copy and distribute

copyrighted works such as "art" (e.g., Thomas Kinkade's painting
"Dawn in Los Gatos") and characters (e.g., Mickey Mouse). With such
license, a licensee need not fear a claim of copyright infringement
brought by the copyright owner.

FRANCHISE

Franchise generally means a right or privilege. It may refer to:

• Franchising, a business method that involves licensing of

trademarks and methods of doing business, such as:
o Chain store, retail outlets which share a brand and central
management
o An exclusive right, for example to sell branded merchandise
o Media franchise, ownership of the characters and setting of a
film, video game, book, etc., particularly in North American
usage
• A cable franchise, a term for a government-granted monopoly
 • "Franchise" (short story), a 1955 short story by Isaac Asimov
• Dem Franchize Boyz, an American hip hop group from Atlanta
• Franchise Pictures, a film production company

MANAGEMENT CONTRACT:

A management contract is an arrangement under which operational

control of an enterprise is vested by contract in a separate enterprise
which performs the necessary managerial functions in return for a fee.
Management contracts involve not just selling a method of doing things
(as with franchising or licensing) but involves actually doing them. A
management contract can involve a wide range of functions, such as
technical operation of a production facility, management of personnel,
accounting, marketing services and training.

In Asia, many hotels operate under management contract arrangements,

as they can more easily obtain economies of scale, a global reservation
systems, brand recognition etc. It is not unusual for contracts to be
signed for 25 years, and having a fee as high as 3.5% of total revenues
and 6-10% of gross operating profit. The Marriott International
Corporation operates solely on management contracts.
Management contracts have been used to a wide extent in the airline
industry, and when foreign government action restricts other entry
methods. Management contracts are often formed where there is a lack
of local skills to run a project. It is an alternative to foreign direct
investment as it does not involve as high risk and can yield higher
returns for the company. The first recorded management contract was
initiated by Qantas and Mr Duncan Upton in 1978.

TURNKEY OPERATIONS:

A turn-key or a turn-key project is a type of project that is constructed

by a developer and sold or turned over to a buyer in a ready-to-use
condition.

Common usage

Turn-key refers to something that is ready for immediate use, generally

used in the sale or supply of goods or services. Turnkey is often used to
describe a home built on the developers land with the developers
financing ready for the customer to move in. If a contractor builds a
"turnkey home" they frame the structure and finish the interior.
Everything is completed down to the cabinets and carpet. "Turnkey" is
commonly used in the construction industry, for instance, in which it
refers to the bundling of materials and labor by sub-contractors.
'Turnkey' is also commonly used in motorsports to describe a car being
sold with drivetrain (engine, transmission, etc.) to contrast with a vehicle
sold without one so that other components may be re-used.

Similarly, this term may be used to advertise the sale of an established

business, including all the equipment necessary to run it, or by a
business-to-business supplier providing complete packages for business
start-up. An example would be the creation of a "turnkey hospital"
which would be building a complete medical center with installed high-
tech medical equipment.

Use in business

In a turnkey business transaction different entities are responsible for

setting up a plant or a part of it. A complex project involving
infrastructure facility, a chemical plant, a packing line or a refinery
demands expertise which is not available with a single firm. The owner
organizes the overall project with a turnkey firm and 'receives' the
project on its completion and can then start to operate it. The 'agents' of
the owner are: the principal engineering firm, the licensor (if
any),service subcontractors (e.g. electrical contractor) and the suppliers.
There may be several contracts drawn up by the principal engineering
firm but they only identify the latter as the recipient of the services. The
principal contract is the one that binds the owner and principal
engineering firm.
A turnkey business is a business that includes everything you need to
immediately start running the business. A business that is being sold as a
turnkey business would include tangibles such as inventory and
equipment through intangibles such as a previously established
reputation and goodwill. The most common type of business sold as a
turnkey business is a franchise. In the case of franchises, a turnkey
business often includes a building that has been constructed to the
franchise's specifications, and an exclusive territory.

Entrepreneurs considering buying a turnkey business should always do

their due diligence and be sure they know exactly what a particular
turnkey operation includes; not all turnkey businesses are created equal!

A turnkey project could involve the following elements depending on its

complexity:

• Project administration
• licensing-in of process
• design and engineering services
• subcontracting
• management control
• procurement and expediting of equipment;
• materials control
• inspection of equipment prior to delivery
• shipment, transportation
 • control of schedule and quality
• pre-commissioning and completion
• performance-guarantee testing
• inventorying spare-parts
• training of owner's/plantsub-systemoperating and
maintenance personnel
• Advanced Loop Schemes (primary used in the Electric
Utility Industry)

A project-consultancy firm is often involved but it is required to stay

independent of the turnkey engineers and be responsible only to the
owner - a watchdog so to speak. The project-consultancy firm has access
to all sections of the infrastructure or plant (as applicable) but cannot
direct the staff involved.

The turnkey-contractor furnishes a wide variety of warranties and

guarantees and accepts several liabilities. These include :

• (a) warranties for the timeliness of deliveries of

equipment, of erection and of completion times of civil and
mechanical works;
• (b) warranties for workmanship in construction annd
erection of the works,according to specifications, and
warranties guarantees that proper standards will be used
 • (c) liability for property or equipment under the control
of the engineering company who contracts out the agreement
to the turnkey-company
• (d) proper safety standards being implemented
• (e)civil and mechanical engineering warranties; in the
latter case the turnkey-contractor undertakes to assure that
mechanical performance will be maintained for a definite
period
• (f) training warranties of operating personnel in charge
of specific operations, and
• (g) the very important process warranties and
guarantees.

Turnkey projects can also be extended, known as 'turnkey plus', where

there is perhaps a small equity interest by the engineering firm or the
main suppliers to ensure allegiance during the initial operational phases.
Once the turnkey phase is over and the engineering firm receives the
'completion certificate', (from the owner), the latter will work
independently or with the licensor (if any).

JOINT VENTURE

A type of ownership sharing among international companies is the joint

venture, in which more than one organization owns a company.
Although companies usually form a joint venture to achieve particular
objectives ,it may continue to operate indefinitely as the objectives is
redefined .joint ventures may have various combinations of ownership.
They are

1. Two companies from the same country joining together in a

foreign market, such as NEC and Mitsubishi in uk.
2. A foreign company joining with a local company , such as great
lake chemical and a.h.al zamil in Saudi Arabia .
3. Companies from two or more countries establishing a joint venture
in a third country such as that of Tata motors and fiat in
Argentina.
4. A private company and a local government forming a joint venture
,such as that of petrobas with the Venezuela.
5. A private company joining a government owned company in a
third country ,such as bp amcoand Eni in egypt

EQUITY ALLIANCE

Equity alliance is a collaborative arrangement in which at least one of

the collaborative companies takes an ownership position in the others .