Burning the candle at both ends: how to balance potential profitability and brand protection when licensing brands

Purpose: Drawing on transaction cost economics, the authors conceptualise brand licensing as a form of alliance. Its performance may be affected by a licensee’s potential opportunism resulting from an imbalance of specific investments in brand-building prior to signing the licensing agreement. From the licensor’s perspective, brand licensing represents a trade-off between brand protection and additional revenues. This study aims to examine how this trade-off shapes licensors’ evaluations of the attractiveness of brand licensing opportunities. Design/methodology/approach: In a vignette study, 121 brand licensing professionals evaluated the attractiveness of up to eight hypothetical brand licensing opportunities with different levels of risk and profitability. Findings From a licensor’s perspective, high brand quality and distribution risks decrease the attractiveness of a licensing opportunity, although the latter risks are more pronounced. High potential profitability has a positive and significant effect on attractiveness. Research limitations/implications: The risks outlined in this study refer to licensee behaviour. The licensor may also behave opportunistically. The authors encourage research designs that enable a dyadic evaluation of licensing opportunities because a comparison of a licensor’s and a licensee’s assessments of the same scenario would be illuminating. Practical implications: The findings enable the development of an evaluation template that directs brand owners’ attention to the risks and gains of brand licensing opportunities. It supports licensors in choosing the “best” opportunity. Originality/value: This study identifies risks emanating from a licensee’s potential opportunism from a licensor’s perspective. It juxtaposes these risks with the potential profitability of brand licensing opportunities. It is thus one of the first studies to address a licensor’s decision-making trade-offs in a large-scale empirical setting

Investors' evaluations of price-increase preannouncements

Several firms preannounce their price increases with the expectation that such announcements will be evaluated favorably by investors. However, little is known about the actual effect they have on shareholder value. Accordingly, the authors present the first systematic empirical examination of investors' evaluations of 274 price-increase preannouncements (PIPs). Results show that whereas the average increase in abnormal returns following a PIP is 0.51%, almost 41% of the PIPs result in negative abnormal returns. To explore this heterogeneity, the authors propose a conceptual framework that focuses on three key pieces of information that investors can use when evaluating a PIP: information on the nature (time to implementation and magnitude) of the preannounced price increase, the stated attribution for the preannounced price increase (demand and/or cost based), and information on prior PIP occurrences by the firm and its competitors. Results indicate that PIPs with greater time to implementation, higher own precedence and greater competitive precedence result in lower abnormal returns, while PIPs with higher magnitude and PIPs with an explicit demand attribution result in greater abnormal returns

The effect of cultural configurations on international business performance – Case: Moomin Characters

Several academics have studied macro environment and strategic decisions and their importance to international business. A new trajectory concerns culture especially important. However, contradictory suggestions are found to occur in existing research regarding the importance and effects of culture on international business performance. Opposite perspectives create a current dilemma for both international business scholars and practitioners and indicate a need for additional research in the field. The aim of this study is to examine how culture affects international business performance from a brand licensor perspective. The main research question is “How does culture affect brand licensor sales revenue?”. Two methodologies are applied, multiple regression analysis (MRA) and fuzzy-set qualitative comparative analysis (fsQCA). The case company of the study is Moomin Characters. Several public databases and information from Moomin Characters management is utilized to collect data. Regarding macro environment and strategic decisions, the results of the study support existing theory on their importance and effect on international business performance, especially from a brand licensor sales revenue perspective. Regarding the main focus of the research, culture, while no cultural configurations are found to consistently lead to outperforming brand licensor sales revenue, four configurations are found to consistently lead to underperforming brand licensor sales revenue. Therefore, while a brand licensor may perform well in several different cultures without a certain cultural fit taken into account, the results of the study indicate that some cultural combinations may lead to a weaker performance than others. Even though this study is conducted as a case study and it reflects the business of Moomin Characters as an extensively international brand licensor with a unique artistic and literary brand dimension, the results can be interpreted to other contexts as well. In addition to such international brand licensors that share similar values to their brand than Moomin Characters, internationally operating brand licensors in general and to some content even international companies as a such benefit from the results

The pharmaceutical industry in Egypt.

This thesis is an assessment of the performance of the Egyptian pharmaceutical industry in the context of am international market for drugs which is dominated by the operation of multinational firms. Chapter I begins with an analysis of the determinants of demand for drugs, followed by a definition of terms and a classification of pharmaceutical products according to their therapeutic usage and the technical processes involved in their manufacture. Section 3 of Chapter 1 describes the structure of the international market for drugs, exploring the major factors responsible for a significant rate of concentration in the industry, an excessive amount of expenditure on innovations and promotion, and unreasonably high prices. Section 4 of Chapter I singles out the specific problems concerning devleloping countries in their acquisition of drugs and examines the arguments so far presented on the subject. Chapter II traces the development of the Egyptian pharmaceutical industry from its early start in a free enterprise environment and through the 1950s when government control gradually became total. Section 1 of Chapter III describes the changing pattern of supply of drugs by multinational firms in various markets. This is followed in Section 2 by a detailed analysis of the operation of multinational firms in Egypt, with special emphasis on their comparative gain from particular forms of investment. Section 3 of Chapter III identifies the costs and benefits derived by the Egyptian economy from the operation of multinational pharmaceutical firms, with a quantitative judgement of figures obtained for the two major kinds of foreign operations in Egypt: subsidiaries and license agreements. Chapter IV gives an assessment of the performance of the nationalised domestic sector of the Egyptian pharmaceutical industry over the period 1960 to 1970/71, using indices for production, value added and profits as basic indicators. The price structure for drugs is also examined for its influence on the profitability of domestic firms and on the production indices for the industry. In Section 3 of Chapter IV the policy of GOPCA, the centralised government body in control of the Egyptian market for drugs, is assessed for its influence on the present and future growth of the industry. Section 4 of Chapter IV is devoted to a close study of the problems which the industry has experienced with backward integration, as portrayed in the operation of the primary producing pharmaceutical chemicals plant, El Nasr. Chapter V summarises the results of this study

The Uniform Commercial Code Drafting Process: Will Articles 2, 2B and 9 Be Fair to Consumers?

Part II examines the structural barriers to full and effective consideration of the impact of revisions to the UCC on consumers. Part I identifies some of the changes in law being made in the drafts of Articles 2, 2B, and 9 and the possible impacts on consumers because of those changes. Part IV describes the types of nonuniform amendments state legislatures have made to Articles 3 and 4