Metro corporation
Metro corporation is a fabricating, steel-rolling company situated in the united states. For foreign market entry, it focuses on licensing. Technologies are confined to engineering peripherals and processes to the basic process of making steel and steel applications in construction and other industries such as the design of petroleum tanks, thermos-adhesion, and methods of welding. All its licensing is handled by international construction and engineering. Impecina is the other company which is the construction company that is the largest in Peru. Its interests are broad in range, including hydraulics works, commercial buildings, and residential, transport, and maritime workers.
The national tank inc, a branch of the metro, had come up with CAD, which can be used to design large tanks over 150 feet diameter and float them, which saves on the steel to be used and generally the cost. Impecina requires large storage tanks for their next project, and what metro was offering would help them not only achieve their goal but cut the cost on the steel used. It is mentioned that 200 million was planned to be used for the project by the government on oil storage. This alliance would be of great benefit to Impecina since all its competitors were affiliated with a prominent company. Impecina made the first move after learning about the CAD to try and at a licensing alliance with the metro. To make the proposal appear attractive, many exclusive territories were used as much as possible, a licensor whose brand name was global was used and while the payment was minimized as much as possible.
While discussing licensee market coverage, Impecina identified as a Peruvian firm in the hope of paying lesser royalty fees and not seem to have large international ambitions. Metro agreed to, in principle, offer territory and exclusivity to the licensee, as long as a minimum performance guarantee was provided. Impecina agreed to a long term agreement of ten years suggested by the metro, which allowed them to make long term payment. Impecina further requested to use the metro name for their bids as their competitors had a collaboration with three US companies. The initial Impecina market target of one-third of the market was optimistic but hard to achieve; the budget was 200 million government expenditure and 40 million in the private sector. This was scaled down to 150 million and 50 million. Metro and Impecina agreed to a royalty payment for both fixed and floating tanks above 100 feet diameter. It was decided that royalty payment would be made for the tank value only since impecina engineers knew civil works, excavation, etc.
For each that are a must for each list are the licensee market coverage, which allows Impecina to reduce their expenditure, trade name, which dictates their winning chances of bids. Licensee market size which determines the terms of their payment. Product mix covered by the license, which allows payment for only tanks over 100 feet diameter. Compensation formula which shows cases a clear outline of the payments. Government intervention dictates how long a licensee life span can be and a royalty basis, which allows the metro to have a percentage on every tank made above 100 feet diameter. The flexible elements include compensation formula, agreement life, and territory, and exclusivity. These are considered flexible because they can change to an agreeable base for both companies.
The role that the government plays in interventions in licensing is awarding the life span of the license according to the rule of the country. The government also awards bids to companies; hence a good relationship is in order. They even decide whether to award foreign companies bids.