The Strategy of Foreign Investors and Licensees: a Philippine Perspective

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6 – THE STRATEGY OF FOREIGN INVESTORS AND LICENSEES: A PHILIPPINE PERSPECTIVE

“To a certain extent, the firms in the developing countries should think in terms of exploiting countries”

Cooperation with a foreign company can provide a shortcut; it can permit the attainment of certain goals which the local company could possibly achieve with each own resources but at a lower cost and in much less time.

POTENTIAL BENEFITS THAT CAN BE DERIVED FROM COOPERATION WITH A FOREIGN FIRM

1. The Philippine company may want access to the patent rights or manufacturing rights for a certain type of product. Or the local company may know that a certain brand of a foreign product is selling very well in the market. The Trademark.

2. The Philippine company may wish to start manufacturing a new product where technical assistance is required. In this case, a technical services agreement will usually accompany a license to manufacture. This service agreement includes;

a. Help in the design and construction of the plant

b. Provide training for the company’s skilled workers, technicians, engineers, and managers.

c. Help in product redesign

d. Help in technical advertising

e. Provide full-time or part-time production engineers to help maintain quality and productivity.

3. When a Philippine company feels that it needs to improve its management system. Sometimes the most efficient way of obtaining modern management know-how is to have a management contract.

4. Access to foreign marketing channels – a foreign company helps in obtaining advice on trends in styles plus assistance in marketing.

5. When a Philippine firm is planning to expand or diversify, additional capital is often required. A joint-venture arrangement of such nature may provide easier access to local financial institutions.

POTENTIAL BENEFITS THAT CAN BE DERIVED FROM COOPERATION WITH A FOREIGN FIRM

1. Loss in the degree of control by Philippine...
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