1. Chapter 9 TRANSFER-RELATED ENTRY MODE STRATEGIES
Global Business Strategy

2. International Leasing
Where firm known as lessor leases its equipment or machines to foreign firm known as leases for a specific period of time.
Benefits
Lessor
Revenue through leasing fees
Fully utilisation of equipment or machines
Business expansion
Lessee
Reduce financial burden
Less hassle and no maintenance cost
Easier way to access to foreign technologies and facilities.
Example : Mitsubishi

3. International Licensing
An agreement between foreign firm (licensor) and local firm (licensee).
Licensor grants specified intangible property right to licensee for a specified period of time.
In return licensor will receive royalty payment
Advantages
Firm able to minimize the costs and risks.
No substantial investment
Good for the firm lacking of capital
Disadvantages
Firm less control on manufacturing and marketing.
Potential loss of intangible property
Licensee may gain knowledge of the products and may become competitor.
Example : Coca Cola – Pepsi (Malaysia)

4. International Franchising
Involved 2 parties franchisor (royalty fees) and franchisee (gets property rights).
Advantages
Low political risks.
Low cost of doing business.
Is an easy way to create revenue by leveraging in assets.
The disadvantages
Franchisee could jeopardize and damage image of firm.
Limited on profit avenue of franchisor.
Example : Coffee Bean, Starbucks, 7-Eleven

5. Build –Operate-Transfer (BOT)
Knows as turnkey projects, foreign investors are paid by client to design & construct new facilities and train locals.
This entry is large-scale, long-term infrastructure.
Arise because of the restriction to FDI imposed by many developing countries.
Advantages
Generate revenue.
Disadvantages
Client may later become competitor.
BOT does not allow long term presence in international market.
Example : Petronas Twin Tower, Kuala Lumpur International Airport.