Licensing Strategy Example Essays

Curious to know how companies like Disney, Starbucks, and Apple use licensing to expand their market, strengthen their brand, and generate new revenue? We’ve got the answer! This article explores the ins and outs of licensing strategy and showcases examples of companies that have proven that licensing can be a powerful business tool.

🔝 Top Licensing Strategy Example Essays

1. International Marketing Management
2. Surf Mode: Entering the U.S. Market
3. The Shift in Burberry’s Strategy in Japan

💡 Licensing Strategy Definition

The licensing strategy is an agreement made with a company (the licensor) for another company to use its intellectual property (IP) under specified conditions for a specified period with a specific payment. For instance, a company may contract with another company in international business to use its intellectual property for X months in exchange for X payment.

What Are the 3 P’s of Licensing?

The 3 Ps of licensing are as follows:

• Protection implies setting standards in contracts that joining companies have to meet to protect the company name and the customers’ rights to a quality product.
• Promotion creates positive visuals around products in the business.
• Profit defines the optimal price to establish the highest profit margins.

Why Is Licensing a Good Strategy?

Licensing your brand can generate a passive income for a business, increasing profits without cost risks. More people will see your merchandise and enlarge your customer portfolio. A good licensing strategy can also expand a product into an overseas market.

What Are the Types of Licensing?

Different licensing approaches have different advantages and disadvantages. A business needs to consider which type of licensing is most suited to its needs.

✔️ Patent Licensing	It allows other companies to create and distribute a patented product.
✔️ Trademark Licensing	This type allows others to use the licensor’s trademark on their goods.
✔️ Copyright Licensing	Copyrighted creations are contracted for use in other products.
✔️ Trade Secret Licensing	It’s protected through secrecy and comes with non-disclosure agreements.

🤔 Difference Between Licensing and Franchising

Licensing and franchising are both business agreements that involve trademarks, copyrights, technology, or other brand elements. However, they are not the same. There are 5 key differences between licensing and franchising.

💰 Licensing	💰 Franchising
Grants permission for select others to use their product, service, or technology but cannot control how the business will operate.	Offers a broader contract that covers how a business operates.
Monetizes trademarks through independent businesses.	Helps brands grow through larger outlets that have a uniform system under a franchisor.
Has a one-time process to transfer property rights.	Requires constant attention from the franchisor.
Registration is not mandatory.	It is mandatory to register for business franchising.
Is governed by contract law.	Is governed by franchising regulations or company law.

🚀 Top 5 Licensing Strategy Example Companies

Now, let’s take a look at the top 5 companies with successful licensing strategies.

Starbucks Licensing Strategy

Starbucks’ strategy allows existing companies to operate a Starbucks kiosk. Coupling this with a franchising strategy, they successfully grew their company from a small Seattle-based coffee developer to a well-known food and beverage store.

Monopoly Licensing Strategy

Monopoly’s partnership with McDonald’s brought Monopoly to life as an instant win game increasing their global exposure. The idea was so successful it is still used repeatedly by other brands.

Kellogg Licencing Strategy

Kellogg’s strategy is basic but effective. Their iconic cereal characters have license deals with companies that make and sell clothing, creating passive revenue for the company.

Apple Licencing Strategy

Apple company concentrates on market entry to other countries. By using a licensing strategy for this, they minimize cost-associated risks.

Marmite Licencing Strategy

Marmite’s strategy allows other businesses to include its signature taste, logos, and trademarks in other foods. It has led to successful creations such as the Marmite Easter Egg providing the company with excellent PR exposure and royalties.

Other companies with great licensing strategies include:

• Adidas,
• Disney,
• Coca-Cola.

We hope our real-life examples helped you better understand what licensing strategy is and how it helped the world’s most successful companies achieve impressive results. Share the article with your friends to boost their studies too!