Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
PRESENTATION: GRO U P 1 CA M E R O N AUTO PARTS (PART A) Kai -Uwe Heesch Knut K rchmann i Nav Nazemian id Siegrun Pache Ni Peters ls Tim Ste fens f Ste ie Wasner fan
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Table o conten : f ts
!In roduc ion ofthe team t t !W ork ing Procedure !Answer ing Quest 1 ion !Answer ing Quest 2 ion !Answer ing Quest 3 ion !Conc ion lus
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Shou Cameron have pre r l cens ld fe red i ing or 1 expor t? W as McTaggar a good cho t ice as l c i ensee?
2 3
W ere the roya t appropr te? lies ia
Scenar 1 Cameron s po t o vew io : ‘ in f i
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Theore ica Background t l Our work ing procedure:
!Team work !Regular Meeti ngs !Minutes !Discuss ions !Bra torming ins !Calcu t la ions !Co mpar ison of d f ren scenar ife t ios
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Theore ica Background t l
Sources 2) Kutschker 1992, 3) Mef r , Bo ,In rna iona es Marke ing : fe t lz te t l t Management
1. Marke Pos t t iion
share sa les vo lume new marke ts
1. Company
or ted ien
- s ra t tegy - cos stua ion t i t
L icens ing
Cont t rac Manufac ing tur
2. Cost ob t jec ives
sca o economy le f product i ga ns ivty i
2. Produc o i ted t r en 3. Marke o i t rented
-lega stua ion l i t - economic s tuat i ion - compete i si ua ion t ve t t -t rade s tua ion i t - consumer s t ion iuat
Mgt Cont t . rac
3. Pro i iiy ftab lt
Jo t in Venture
O wn Subs ia i id res
-
pro i s ft re rn on sa tu les re rn on cap t l tu ia
4. F inanc l ia
Acqu iion is t
Group 1 Cameron Auto Par (Par A) ts t
-
cred t i lqu i i id ty se ff l inanc ing cap ta lay t i l -ou
© a lcopyr ghts waterproo concepts l i : f
1)
ob t jec ives
Handout In rna i l Marke ing Prof J Höppner p 91 te tona t , .. , .
Overv iew o fPoss le Ent y St teg ib r ra ies : 3 ) Objec ives t : 2 ) Expor ing t Determinants:
1)
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Theore ica Background t l
L icens ing :
1)
Ho me count ry
Do mest company ic = l censor i
patents copyr ts igh t rademarks know-how fees roya t lies
Loca company l =l icensee
Host count ry
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
1)
Handout In rna i l Marke ing Prof J Höppner p 98 te tona t , .. , .
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Theore ica Background t l
Expor : t
1 )
Ho me count ry
Do mest company ic
Expor depar ment t t
i i t nd rec d rec i t
Independent In rna iona te t l Market ing In rmed to te ia r
Agent Dis r tor t ibu Sales Branch
Host count ry
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
1)
Handout In rna i l Marke ing Prof J Höppner p 97 te tona t , .. , .
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Shou Cameron have pre r l cenc ld fe red i ing or expor t? W as McTaggar a good cho t ice as a l censee? i W ere the roya t appropr te? lies ia
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
L icens ing vs Expor . t
Advantages of L icens ing
Disadvantages of L icens ing
Advantages of Expor t
Disadvantages of Expor t
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Advantages o L f icens ng i
Low investment cos ts Reduced f nanc l r s i ia i k M imised r sk o poor per rmance o i in i f fo flcensee Economies o scope f Qu ick market en ry t
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Disadvantages o L f icens ing
Lack o revenue t f ransparency oflcensee i Less in luence f No cont l over loca bus ro l iness R o image loss isk f Know-how d f ion i fus Com municat gaps ion Loss o f iblt (Com mitment f a spec fc t f lex ii y or ii ime) Shared profts i
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Advantages o Expor f t
Independence Economies o sca n the long r f lei un H igher qua i y th lt rough own respons ii y ib lt H igher p oft/ no proft shar r i i ing
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Disadvantages o Expor f t
H Inves igh tments Lack o capac ty f i No spec fc market knowledge ii Cur rency r sks i T ranspor r sks ti T rade barr rs ie
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Prepara tory ca la ions lcu t Premises :
Pr ice charged by Cameron as expor r $ 100/un t te : i Pr ice charged by McTaggar as d tibu : $ 176/un t t is r tor i Pr ice charged by McTaggar as lcensee: $ 176/un t(exh i 3 page 12) t i i ib t ,
Revenue poten ia o McTaggar : 100 % t l f t Revenue poten ia o Ca meron: 100 x 100= 56 t l f .82% 176
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Prepara tory ca la ions lcu t
L icens : ing
Roya t : lies
" 3% up to $ 1.5 Mio " 2% over $ 1 5 Mio . " $ 100,000 knowledge t rans fees fer
Expor : t
" Pro i ii y on revenue: 16.67 % ftab lt based on fo recas 1994: $ 5 Mio pro i x 100 = 16 t ft .67% $ 30 Mi revenue o
Ca meron pro i:f ) 0.03x + 0 ‘s ft (x -> .02y + 0 .1667z
x= McTaggar ‘ r t s evenue up to $ 1.5 Mio (L icens ing) y=McTaggar ‘ r t s evenue over $ 1 5 Mio (L . icens ing) z= Cameron revenue expor ‘s t
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Expor a t lways more pro i le than l cens ftab i ing
C O M PA RISON OF PR OFITS: L ICENSING VS. EXPO RT
Scenaros i Aler i t natves Li i censng Expor t
bad
m edi um
good
$ 1 000 5, $ 47, 380
$ 45, 000 $ 1 045 42,
$ 1 000 35, $ 568,81 1
x=500,000 x =1.5 Mio x =1.5 =6 Mio Mio y=0 y=0 y=1.5 Mio z=284,090 z=852,270 z=3,409,090 x= McTaggar ‘ revenue up t $ 1 Mio (L cens ts o .5 i ing) y=McTaggar ‘ revenue over $ 1 Mio (L ts .5 icens ing) z= Cameron r ‘s evenue expor t
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Expor a t lways more pro i le than l cens ftab i ing
C O M PA RISON OF PR OFITS: L ICENSING VS. EXPO RT
Thousand USD
600 500 400 300 200 100 0 Licensing Export
56
8
14 7 15 4
bad 45
2
135
Scenar io
medium good
© a lcopyr ghts waterproo concepts l i : f
Group 1
Cameron Auto Par (Par A) ts t
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Conc ion lus
Expor more pro i le t ftab
BUT
L icens ing easi rto imp e lement because of res r c t i ted capac t iies New p t $ 10 Mio lan : or Two-sh f work it or Reduct ion o fcore bus iness
Change to expor poss le a te 5 years t ib f r
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Shou Cameron have pre r l cenc ld fe red i ing or expor t? W as McTaggar a good cho t ice as a l censee? i W ere the roya t appropr te? lies ia
YES!
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
High equ ty quo leads to exce lent c i i ta l red t wor iness th M CTA G G A RT‘S TOTAL BALAN CE SHEET
100 80 60 40 59% 20 0 100% 41%
liabilities equity
[Page 12, case study par A t ]
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
In tense decrease o McTaggar ‘ revenues f ts
REVEN UES OF MCTA G G A R T BET W EE N 1991 AND 1993
£ Mio 45
40 35 30 25 20 15 10 5 0
44 35
Revenues
1991
1993
Year
[Page 12, case study par A t ]
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
In sp te o r i f evenue decreases McTaggar reached a t remarkab p ft le ro i
PR OFITABIL ITY OF MCTA G G A RT IN 1993
Revenue Profit 35 1,5 0 10 20 30 40
£ Mio
[Page 12, case study par A t ]
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Advantages o the cho fo McTaggar : f ice r t
Capac t iies Exce len l t c i records red t Flex le respond ib to fo rmer c iss r i Rel ii yth ough iab lt r t iion rad t Good marke t knowledge
High ca ib l re sa fo les rce
Techno logy f low-back
No research f or a te t sol t l rna ive uion
Di f cu tto cont l fi l ro McTaggar ‘ bus ts iness
L ted sa imi les area (UK on ly)
Disadvantages o the cho fo f ice rMcTaggar : t
[Page 12, case study par A t ]
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Shou Cameron have pre r l cenc ld fe red i ing or expor t? W as McTaggar a good cho t ice as a l censee? i W ere the roya t appropr te? lies ia
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
W hat we get :
3 % roya t up lies to 1 Mio .5 revenues 2 % roya t lies over 1 Mio .5 $100,000 knowledge t rans fee fer L icense fo 5 r years renewab , le fo fu ther 5 years r r Image, Name, Brand
Free techno logy t rans c fer lause
Our techno logy knowhow fo p r roduc ing f ib coup ings lex le l
W hat we o fe : f r
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Roya t t reach expor p ft : lies o t ro i s 100 x 0 .1667 x 100 = 9.47 % 176 McTaggar ‘ p ft on r ts ro i evenue (as expor d tibu ) t is r tor : 35 x 100 = 19 % .89 176 McTaggar ‘ p ft on r ts ro i evenue (as lcensee) i : -> Supposed to be h gher because o .. i f. Lower labour cos ts No impor and t t ranspor cos t ts No producer marg (Cameron) ins
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Conc ion: lus Current roya ty o 3% / 2% is TOO LO W ! l f Expor -equi len t va troya ty o 9 l f .47% isi rea i t r ls ic
Our sugges ion t :
5% wou be appropr ate ld i Th ra wouldn t decrease McTaggar ‘ mot t is te ‘ ts iva ion
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Thanks fo your a ten i r t ton!
Sources :
1) 2) 3 )
Handout In rna iona Marke ing, Pro . J Höppner p. 91 te t l t f . , Kutschker 1992 Mef r ,Bolz In rnat fe t , te iona Market Management les ing
Quest ons? i
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
doc_685259157.pdf
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
PRESENTATION: GRO U P 1 CA M E R O N AUTO PARTS (PART A) Kai -Uwe Heesch Knut K rchmann i Nav Nazemian id Siegrun Pache Ni Peters ls Tim Ste fens f Ste ie Wasner fan
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Table o conten : f ts
!In roduc ion ofthe team t t !W ork ing Procedure !Answer ing Quest 1 ion !Answer ing Quest 2 ion !Answer ing Quest 3 ion !Conc ion lus
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Shou Cameron have pre r l cens ld fe red i ing or 1 expor t? W as McTaggar a good cho t ice as l c i ensee?
2 3
W ere the roya t appropr te? lies ia
Scenar 1 Cameron s po t o vew io : ‘ in f i
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Theore ica Background t l Our work ing procedure:
!Team work !Regular Meeti ngs !Minutes !Discuss ions !Bra torming ins !Calcu t la ions !Co mpar ison of d f ren scenar ife t ios
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Theore ica Background t l
Sources 2) Kutschker 1992, 3) Mef r , Bo ,In rna iona es Marke ing : fe t lz te t l t Management
1. Marke Pos t t iion
share sa les vo lume new marke ts
1. Company
or ted ien
- s ra t tegy - cos stua ion t i t
L icens ing
Cont t rac Manufac ing tur
2. Cost ob t jec ives
sca o economy le f product i ga ns ivty i
2. Produc o i ted t r en 3. Marke o i t rented
-lega stua ion l i t - economic s tuat i ion - compete i si ua ion t ve t t -t rade s tua ion i t - consumer s t ion iuat
Mgt Cont t . rac
3. Pro i iiy ftab lt
Jo t in Venture
O wn Subs ia i id res
-
pro i s ft re rn on sa tu les re rn on cap t l tu ia
4. F inanc l ia
Acqu iion is t
Group 1 Cameron Auto Par (Par A) ts t
-
cred t i lqu i i id ty se ff l inanc ing cap ta lay t i l -ou
© a lcopyr ghts waterproo concepts l i : f
1)
ob t jec ives
Handout In rna i l Marke ing Prof J Höppner p 91 te tona t , .. , .
Overv iew o fPoss le Ent y St teg ib r ra ies : 3 ) Objec ives t : 2 ) Expor ing t Determinants:
1)
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Theore ica Background t l
L icens ing :
1)
Ho me count ry
Do mest company ic = l censor i
patents copyr ts igh t rademarks know-how fees roya t lies
Loca company l =l icensee
Host count ry
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
1)
Handout In rna i l Marke ing Prof J Höppner p 98 te tona t , .. , .
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Theore ica Background t l
Expor : t
1 )
Ho me count ry
Do mest company ic
Expor depar ment t t
i i t nd rec d rec i t
Independent In rna iona te t l Market ing In rmed to te ia r
Agent Dis r tor t ibu Sales Branch
Host count ry
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
1)
Handout In rna i l Marke ing Prof J Höppner p 97 te tona t , .. , .
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Shou Cameron have pre r l cenc ld fe red i ing or expor t? W as McTaggar a good cho t ice as a l censee? i W ere the roya t appropr te? lies ia
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
L icens ing vs Expor . t
Advantages of L icens ing
Disadvantages of L icens ing
Advantages of Expor t
Disadvantages of Expor t
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Advantages o L f icens ng i
Low investment cos ts Reduced f nanc l r s i ia i k M imised r sk o poor per rmance o i in i f fo flcensee Economies o scope f Qu ick market en ry t
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Disadvantages o L f icens ing
Lack o revenue t f ransparency oflcensee i Less in luence f No cont l over loca bus ro l iness R o image loss isk f Know-how d f ion i fus Com municat gaps ion Loss o f iblt (Com mitment f a spec fc t f lex ii y or ii ime) Shared profts i
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Advantages o Expor f t
Independence Economies o sca n the long r f lei un H igher qua i y th lt rough own respons ii y ib lt H igher p oft/ no proft shar r i i ing
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Disadvantages o Expor f t
H Inves igh tments Lack o capac ty f i No spec fc market knowledge ii Cur rency r sks i T ranspor r sks ti T rade barr rs ie
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Prepara tory ca la ions lcu t Premises :
Pr ice charged by Cameron as expor r $ 100/un t te : i Pr ice charged by McTaggar as d tibu : $ 176/un t t is r tor i Pr ice charged by McTaggar as lcensee: $ 176/un t(exh i 3 page 12) t i i ib t ,
Revenue poten ia o McTaggar : 100 % t l f t Revenue poten ia o Ca meron: 100 x 100= 56 t l f .82% 176
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Prepara tory ca la ions lcu t
L icens : ing
Roya t : lies
" 3% up to $ 1.5 Mio " 2% over $ 1 5 Mio . " $ 100,000 knowledge t rans fees fer
Expor : t
" Pro i ii y on revenue: 16.67 % ftab lt based on fo recas 1994: $ 5 Mio pro i x 100 = 16 t ft .67% $ 30 Mi revenue o
Ca meron pro i:f ) 0.03x + 0 ‘s ft (x -> .02y + 0 .1667z
x= McTaggar ‘ r t s evenue up to $ 1.5 Mio (L icens ing) y=McTaggar ‘ r t s evenue over $ 1 5 Mio (L . icens ing) z= Cameron revenue expor ‘s t
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Expor a t lways more pro i le than l cens ftab i ing
C O M PA RISON OF PR OFITS: L ICENSING VS. EXPO RT
Scenaros i Aler i t natves Li i censng Expor t
bad
m edi um
good
$ 1 000 5, $ 47, 380
$ 45, 000 $ 1 045 42,
$ 1 000 35, $ 568,81 1
x=500,000 x =1.5 Mio x =1.5 =6 Mio Mio y=0 y=0 y=1.5 Mio z=284,090 z=852,270 z=3,409,090 x= McTaggar ‘ revenue up t $ 1 Mio (L cens ts o .5 i ing) y=McTaggar ‘ revenue over $ 1 Mio (L ts .5 icens ing) z= Cameron r ‘s evenue expor t
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Expor a t lways more pro i le than l cens ftab i ing
C O M PA RISON OF PR OFITS: L ICENSING VS. EXPO RT
Thousand USD
600 500 400 300 200 100 0 Licensing Export
56
8
14 7 15 4
bad 45
2
135
Scenar io
medium good
© a lcopyr ghts waterproo concepts l i : f
Group 1
Cameron Auto Par (Par A) ts t
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Conc ion lus
Expor more pro i le t ftab
BUT
L icens ing easi rto imp e lement because of res r c t i ted capac t iies New p t $ 10 Mio lan : or Two-sh f work it or Reduct ion o fcore bus iness
Change to expor poss le a te 5 years t ib f r
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Shou Cameron have pre r l cenc ld fe red i ing or expor t? W as McTaggar a good cho t ice as a l censee? i W ere the roya t appropr te? lies ia
YES!
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
High equ ty quo leads to exce lent c i i ta l red t wor iness th M CTA G G A RT‘S TOTAL BALAN CE SHEET
100 80 60 40 59% 20 0 100% 41%
liabilities equity
[Page 12, case study par A t ]
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
In tense decrease o McTaggar ‘ revenues f ts
REVEN UES OF MCTA G G A R T BET W EE N 1991 AND 1993
£ Mio 45
40 35 30 25 20 15 10 5 0
44 35
Revenues
1991
1993
Year
[Page 12, case study par A t ]
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
In sp te o r i f evenue decreases McTaggar reached a t remarkab p ft le ro i
PR OFITABIL ITY OF MCTA G G A RT IN 1993
Revenue Profit 35 1,5 0 10 20 30 40
£ Mio
[Page 12, case study par A t ]
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Advantages o the cho fo McTaggar : f ice r t
Capac t iies Exce len l t c i records red t Flex le respond ib to fo rmer c iss r i Rel ii yth ough iab lt r t iion rad t Good marke t knowledge
High ca ib l re sa fo les rce
Techno logy f low-back
No research f or a te t sol t l rna ive uion
Di f cu tto cont l fi l ro McTaggar ‘ bus ts iness
L ted sa imi les area (UK on ly)
Disadvantages o the cho fo f ice rMcTaggar : t
[Page 12, case study par A t ]
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Shou Cameron have pre r l cenc ld fe red i ing or expor t? W as McTaggar a good cho t ice as a l censee? i W ere the roya t appropr te? lies ia
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
W hat we get :
3 % roya t up lies to 1 Mio .5 revenues 2 % roya t lies over 1 Mio .5 $100,000 knowledge t rans fee fer L icense fo 5 r years renewab , le fo fu ther 5 years r r Image, Name, Brand
Free techno logy t rans c fer lause
Our techno logy knowhow fo p r roduc ing f ib coup ings lex le l
W hat we o fe : f r
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Roya t t reach expor p ft : lies o t ro i s 100 x 0 .1667 x 100 = 9.47 % 176 McTaggar ‘ p ft on r ts ro i evenue (as expor d tibu ) t is r tor : 35 x 100 = 19 % .89 176 McTaggar ‘ p ft on r ts ro i evenue (as lcensee) i : -> Supposed to be h gher because o .. i f. Lower labour cos ts No impor and t t ranspor cos t ts No producer marg (Cameron) ins
Group 1 Cameron Auto Par (Par A) ts t © a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Conc ion: lus Current roya ty o 3% / 2% is TOO LO W ! l f Expor -equi len t va troya ty o 9 l f .47% isi rea i t r ls ic
Our sugges ion t :
5% wou be appropr ate ld i Th ra wouldn t decrease McTaggar ‘ mot t is te ‘ ts iva ion
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
Prof Dr Ra . . iner Schnauf r fe
In rna i le Koopera ion und L te t ona t izenzvergabe Sciences
Un ivers ty o App i i f led
Thanks fo your a ten i r t ton!
Sources :
1) 2) 3 )
Handout In rna iona Marke ing, Pro . J Höppner p. 91 te t l t f . , Kutschker 1992 Mef r ,Bolz In rnat fe t , te iona Market Management les ing
Quest ons? i
Group 1
Cameron Auto Par (Par A) ts t
© a lcopyr ghts waterproo concepts l i : f
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