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0 Introduction Given the global opportunities, each year hundreds of entrepreneurial and growing companies consider international expansion as a marketing and growth strategy (Sherman & Levine, 2013). While capitalizing on the opportunities in the global marketplace, organizations seek to enhance their competitiveness. Numerous benefits including economies of scale, access to know-how and technology, diversified assets portfolio, access to toughest customers, establishment of a single worldwide brand, brand recognition and so on are identified with expanding operations abroad. According to Cateora and Graham, there are four distinct ways of foreign market entry: licensing and franchising, exporting, joint ventures and direct foreign investment. In the assigned project we will shed light on each of the mentioned methods and select one of the methods for expanding the operations of Samsung, keeping the market characteristics and company capabilities in mind. 2.0 Franchising A franchise can be defined as an agreement or license between two legally independent parties which gives a person or group of people the right to market a product or service using the trademark or trade name of another business (Beshel, 2001). The party granting the franchise is known as a franchisor and the party accepting it is known as the franchisee (or franchise holder) (Peretiatko, Humeniuk, DSouza & Gilmore, 2009). Franchising can take two forms: product distribution and business format. The former uses franchisor trademark and logo to sell products like Exxon, whereas the latter requires provision of products and business methods such as McDonalds (Combs, Michael & Castrogiovanni, 2004).

2.1 Characteristics of Franchising Noteworthy service component and unique distribution of responsibilities, decision rights, and profits between the franchisor and franchisee (Combs, Michael & Castrogiovanni, 2004). Starting business quickly based on a proven trademark, and the tooling and infrastructure as opposed to developing them. Franchisor sets chain-wide standards for performance, selects franchisees, approves outlet locations, manages brand image, and coordinates activities (Combs, Michael &Castrogiovanni, 2004). Franchisees establish local outlets, their policies on price, hours, and staffing, and manage day-to-day operations.1in exchange for profits after royalties and expenses. Payment of initial fee plus royalties by the franchisee. Royalties paid in accordance with sales not profits (Siebert, 2005).

 Franchise time period ranges from five to thirty years, broken into shorter periods requiring renewal. Growing trends in franchising include multi- brand and co- branding.1 Franchisees own the assets of their company, and have specific rights under franchise laws. Franchisee associations formed to participate in corporate decision-making which can also collectively oppose decisions seen as detrimental to their operation and the brand in general. Franchise agreements can be terminated if a party breaches or repudiates the agreement, if the agreement was a result of misrepresentation or other misconduct, if the contract is illegal based on some fundamental mistakes or if the agreement is unfair, unconscionable or unlawful (Rowe, 2010). 2.2 Laws regulating franchises There are three general categories of laws regulating franchises which are: Disclosure laws: Regulating required pre-sale disclosures, prohibited franchise sales practices and mandatory cooling-off period before franchise sales. Registration laws: Requires registration of franchise, franchise salespersons and franchise advertising. Relationship laws: Govern aspects of relationship between franchisor and franchisee such as grounds for terminating a franchise, notice and cure periods before termination, grounds for not renewing a franchise and equal treatment of franchisees. 2.3 Key subjects in franchise agreement Use of Trademarks The use of well- known trademarks is one significant benefit received when purchasing a franchise. The agreement lists the trademarks, service marks or logos the franchisee is entitles to use. Location of the franchise The franchise agrrement also describes the exclusivity provided to a franchisee in terms of area and geography. Term of the franchise Term of the franchise incorporates information regarding duration of the agreement. It specifies the length of time the agreement would last for and on what terms renewal can take place. Franchisees fees and other payments In this section, all the mandatory fees inclusive of initial fee and royalty payment are described Obligations and duties of the franchisor The franchisors responsibilities towards the franchisee are detailed in this particular section. Restriction on goods and services offered This section describes any restrictions placed on the gooods and services offered in terms of required quality, standard, suppliers, advertising, hours of operation and pricing. Renewal, termination and transfer of franchise agreement
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Multi-brands franchisees operate in different brands under a single organization whereas co-branding franchisees operate two brands from same location.

This section includes the rights and obligations of a franchisee upon termination, descriptions about the transfer of the franchise agreement and descriptions about the renewal of the franchise agreement. 2.4 Obligations Franchisors Obligations Support, encourage, and provide assistance and know-how (Cockburn, 2004). Provision of accurate information in the Disclosure Document. Provision of mandatory statement (if any) early in the negotiation process. Vigilant articulation about future potential, profitability and turnover to avoid misleading representations (Barnes, 2009). Maintain, distribute and update manuals, operating procedures and quality requirements when changes are made (Cockburn, 2004) Act in common faith i.e. must have evidence of misconduct on wishing to terminate the agreement on such grounds (Rowe, 2010). In case mistakes or shortcomings are not looked into, it must be assumed that the franchisee made no mistake (Billiet & Co.). Franchisee Obligations Conduct business along prescribed guidelines and in accordance with the franchisors best operating practice. Perform due diligence by speaking with current franchisees and reading the franchising disclosure document with the aid of an experienced franchise attorney. Continuing obligation to pay fees in accordance with the franchise arrangement. These fees usually include an advertising / marketing component as well as an on-going management service fee. Protect the intellectual property of the franchise system. Operate in accordance with territorial or geographical obligations agreed upon. 2.5 Advantages and Disadvantages of franchising According to the International Franchise Association, there are extensive advantages of owning a franchise. First, the product or service offered via a franchise is well-established with a strong brand name-recognition. Thus, this enables in acquisition of a pre-sold customer base. Additionally, the chances of increasing business success are higher associating with proven methods and products. As per the franchise agreement, franchises offer a certain level of quality and consistency consequently attracting customers. Some very important pre-opening support is offered by franchises which includes site selection, design and construction, financing, training and grand-opening program. Lastly, franchises offer ongoing support like training, national and regional advertising, operating procedures and operational assistance, ongoing supervision and management support and increased spending power and access to bulk purchasing. Nonetheless, there also certain disadvantages noted. The franchisee is not completely independent. Franchisees are required to operate their businesses according to the procedures and restrictions set forth by the franchisor in the franchisee agreement. These restrictions usually include the products or services which can be offered, pricing and geographic territory. For some people, this is the most serious disadvantage to becoming a franchisee. A damaged, system-wide image can result if other franchisees are performing poorly or the franchisor runs into an unforeseen problem. The term (duration) of a franchise agreement is usually limited and the franchisee may have little or no say about the terms of a termination.

3.0 Licensing The International Licensing Industry Merchandisers' Association (LIMA) defines licensing as the process of leasing a trademarked or copyrighted entity for use in conjunction with a product, service or promotion. The property could be a name, likeness, logo, graphic, saying, signature, character or a combination of several of these elements. It is based on a contractual agreement between the owner of the property, called the licensor or the renter of rights, and the future licensee. A license agreement agreement is a formal, preferably written, document recording the circumstances under which a promise shall be legally binding on the person making it. The permission to use the licensors property is subject to terms and conditions regarding specific purpose, defined geographic area, and a time period. In turn the licensor receives financial remuneration. Royalty is part of the financial compensation received by licensor and is a percentage of the licensees sale of products covered by the license. Licensing also includes a guarantee or minimum sum that the licensee is obligated to pay regardless of sale of the product. A percentage of this sum is often paid as an advance at the time the deal is signed. Significant Licensable properties include character and entertainment, art, corporate trademark and brand licensing, fashion, sports, collegiate, publishing, and music. Therefore, a license agreement is a partnership between an IP owner (licensor) and another who is authorized to use such rights (licensee) under certain conditions, usually for a monetary compensation in the form of a flat fee or running royalty that is often a percentage or share of the revenues gained from use of the invention. Simply put, a license grants the licensee rights in property without transferring ownership of the property. 3.1 Advantages and disadvantages of licensing Important advantages of licensing to both the licensor and the licensee have been identified by LIMA and Mobius License Management Group. First, the licensor obtains marketing support for the core business. The agreement also helps extend a corporate brand into new categories, areas of a store, or into new stores overall. It offers the opportunity to try out news businesses or geographical markets with relatively small upfront risk. Throughout, the licensor is maintaining control over an original creation. Brand owner benefits from the revenues generated beyond the normal revenue and profit stream. Licensing also renders increased awareness of the brand and its core products amongst customers who otherwise might not be brand aware. Lastly, it allows consumers to acquire authorized rather than illegal or unauthorized products using the brand name, marks and logo. In the case of licensee, the agreement opens a door to gaining consumer awareness and marketing benefits. There is often a rush to reach the market with new products. A license agreement that gives access to technologies and brands which are already established or readily-available can make it possible for an enterprise to reach it on time. Small companies may not have the resources to conduct research and development that is necessary to provide new or superior products. A license agreement can give an enterprise access to technical advances, which would otherwise be difficult for it to access. A license can also be necessary for the maintenance and development of a market position that is already well established but is threatened by a new design or new production methods. The costs entailed in order to follow events and trends can become daunting and quick access to a new technology through a license agreement may be the best way to overcome this problem. However, this can increase the product cost and affect the market price in unpredictable ways. There may also be licensing in opportunities, which, when paired with the companys

current technology portfolio, can create new products, services and market opportunities. There are other benefits as well including reduction of in-house cost, enhanced authenticity and credibility, and competitive advantage over less established competitors. On the contrary, there are certain non-negligible risks associated with licensing. Sometimes the licensors own investment can generate better profits than operating only or through a license agreement. A licensee can become the licensors competitor. The licensee may cannibalize sales of the licensor, causing the latter to gain less from royalties than it loses from sales lost to its new competitor. The licensee may be more effective or get to the market faster than the licensor because it may have fewer development costs or may be more efficient. The licensee may suddenly ask for contributions, such as technical assistance, instruction of personnel, additional technical data, etc. All this may simply prove to be too expensive for the licensor. It is important that the license agreement clearly define the rights and responsibilities of the parties, so that any future disagreements can be quickly and efficiently resolved. The licensor depends on the skills, abilities and resources of the licensee as a source of revenue. This dependence is even greater in an exclusive license where an ineffective licensee can mean no royalty revenues to the licensor. Contractual provisions for minimum royalties and other terms can guard against this, but it is still a concern. Specific consideration should be made when licensing out the right to use a trademark. The principle function of a trademark is to distinguish the goods and services of one enterprise from that of another, thereby often identifying the source and making an implied reference to quality and reputation. This function is to some extent prejudiced if the trademark owner licenses another enterprise to use the trademark through a trademark license agreement. Therefore, the trademark owner is well advised, often required by law,, to contractually ensure that the quality standards are maintained so that the consumer is not deceived. A license agreement can be disadvantageous when the product or technology is not clearly defined or is not complete. In such a case, the licensor may be expected to continue development work at great expense to satisfy the licensee. To the licensee, an IP license may add a layer of expense to a product that is not supported by the market for that product. It is fine to add new technology, but only if it comes at a cost that the market will bear in terms of the price that can be charged. Multiple technologies added to a product can result in a technology rich product that is too expensive to bring to market; Licensing in technology may create a technological dependence on external technology and/or limit the possibilities for growth and expansion (e.g. into new markets) of the licensee according to the provisions stipulated in the licensing agreement; The licensee may have made a financial commitment for a technology that is not ready to be commercially exploited, or that must be modified to meet the licensees business need; 3.2 License Agreement There are very few standard licensing transactions. A lot will depend on the commercial context and the agreement used to transfer the rights should be tailored to accomplish the commercial objectives. Relevant issues will include: The bundle of intellectual property rights being licensed. What type of activities are permitted? Whether the grant is exclusive or non-exclusive. Whether sub-licensing rights are appropriate. Whether there should be field of use or territorial limits. What approach should be taken to improvements and infringement issues?

What obligations should be placed on the licensee? What is the reward for the licensor? What obligations of confidentiality should be imposed? If disputes arise, how should they be resolved? What is the duration of the licence, and what termination rights should be imposed? What are the obligations post-termination?

4.0 Exporting The merriam-webster dictionary describes exporting as conveyance of commodities from one country or another for purposes of trade. It has been considered a profitable way of expanding operations abroad, spreading risk and preventing over dependence on local market. Exportable products include goods services, and intellectual property. It is not necessarily required for a product to leave a coutry to be considered an export, as long as it earns foreign currency. For instance, in-bound tourism is an export. Additionally, owing to technological advances intellectual capital can be transferred internationally without actually leaving the origins. Successful export relies on access to practical, reliable and updated information on macro and micro environment of nations. 4.1 Types of Export Exports can be categorized as direct and indirect exports. Direct export is the kind in which firms enter foreign market directly and sell to customers in that country. The firm exporting undertakes extensive marketing task including choosing appropriate pricing and promotional strategies for the foreign markets, agents or distributors to represent the firm in those markets, handling international shipping and finance, and preparing export documentation. Direct export ensures greater control over the export process, higher profits and closer relationship to overseas market. However as opposed to indirect exporting needs, direct exporting requires allocation of more time, personnel and corporate resources by the firm. On the other hand, indirect exporting involves selling to export intermediaries who in turn exports to overseas customers. The indirect exporter has minimal direct contact with the end customers. Sales are negotiated with a trader in the exporters country with payments made in local currency from the traders office. For instance, a Japanese trading house in Victoria may arrange the contract for the supply of a particular product for the Japanese market. The principal advantage of indirect marketing is that it provides a way to penetrate foreign markets without the complexities and risks of direct exporting. 4.2 Advantages and disadvantage of exporting Exporting provides substantial opportunities to expand business, increase profitability, spread risks, reduce dependence on local market, use excess production capacity and buffer against seasonal demand (Hunter Central Coast Export Centre, 2011). Domestic markets may not provide the chance of growth that foreign markets may provide. In case of specialized products operating solely in the domestic market may result in lack of customers. Competing in the foreign markets also helps constantly revamp products in order to meet the new trends. Not only does exporting educate the firm on constant developments in the markets of competitors but also makes it possible to neutralize overseas competitors in the domestic market. Lastly, selling in an international environment helps sharpen a firms innovative edge providing scope to develop new strengths and abilities and open up opportunities.

When exporting, the firm is exposed to the macro environment of the foreign market. This is not only an added pressure to deal with but also might lead to firms focus drifting away from its own domestic market. Some of the macro-environment risks that organizations face are political risks, legal risks, financial risks and transport risks (Hunter Central Coast Export Centre, 2011). Political risk comes about due to the political stability of the destination country. Default or blockage of payment and confiscation of property are some effects of an instable political environment. Next, legal risk deals with the effects brought about by the legislation of a destination country on the business. It affects import procedures, taxation, employment, intellectual property, currency and contract and agency/distributorship arrangements. Thirdly, financial risks include credit risk, transfer risks and exchange risk. Lastly, transport of goods may be encumbered by risks of damage, loss and theft. Regulations and quarantine requirements vary across countries which should be assessed before any shipments are made. A business must possess adequate resources to export, in the absence of which export may need to be subcontracted running the risk of losing control over quality.