International licensing is a foreign market entry mode which presents many disadvantages and reasons why companies do not use it as opportunity but sees it as a limitation because there is:
Lower level of income in this mode than in other entry modes.
Risk of having the reputation and trademark ruined by an incompetent partner
Loss of control of the licensee manufacture and marketing operations and practices which leads to the loss of quality.
The foreign partner can become a competitor also by selling its products in places where the parental company has a presence.
International licensing is a business arrangement in which one company gives another company a permission to manufacture its product for a specified payment.
Licensing is also defined as the granting of permission by the licenser to the licensee in order to use intellectual property rights, such as patents, trademarks, brand names, or technology etc.
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