Advantages of licensing include brand recognition, trademark protection and enhanced credibility. Licensing helps a business to increase its market share through enhanced awareness. It promotes the business’s position in the market. Licensing also generates revenues for the government.Know More
A license is a legal contract permitting a company or individual to conduct one or more businesses within specific parameters. Licensing is an important practice to all stakeholders including manufacturers, retailers, consumers and the license issuing authority.
A license is fundamental to business as it provides a company with competitive advantage. Following a widespread influx of generic and counterfeit products, consumers are comfortable dealing with licensed brands. Licensing builds and enhances the brand image to a larger market and acts as a form of advertisement that aids in creating the brand’s awareness in the market.
Licensed manufacturers provide some level of assurance that consumers obtain authorized and not illegal products. Manufacturers also benefit from the licensing authority’s promotional and advertising programs to support the trademark. This helps to generate more revenues for manufacturers and retailers through the sale of authorized products to a wider market.
Despite the numerous benefits, licensing has some disadvantages. One major shortcoming of licensing is that it increases competition by creating a level playing ground. Licensing also exposes manufacturer’s confidentiality, propriety and production process.Learn more about Business Resources
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Competition can promote market growth and lead to better products supplied to the consumer market, but it can also lead to an exhausting workload and immense financial strain for the companies invested in competing, which can cause further problems. The issue is a complex one that encompasses capitalist economics and influences, based on the performance of the marketplace and other market forces.Full Answer >