IMM MODIFIED

The Metro Corporation The Metro Corporation Technology licensing negotiationTechnology licensing negotiation

By By

K. Hari Krishna( 1226210115)K. Hari Krishna( 1226210115)

Hima teja ( 1226210116)Hima teja ( 1226210116)

Gunasekaran( 1226210113Gunasekaran( 1226210113))

Metro CorporationMetro Corporation Metro corporation is a diversified steel rolling, fabricating Metro corporation is a diversified steel rolling, fabricating

and construction company .and construction company .

It as far more frequently focused on licensing as a It as far more frequently focused on licensing as a market entry method with technologies confined to ---market entry method with technologies confined to ---

1) process and peripheral to the steel making process.1) process and peripheral to the steel making process.

2) Applications of steel in construction and other industries2) Applications of steel in construction and other industries

All metro licensing is handled by its international division, All metro licensing is handled by its international division, International construction and engineering ( ICE) International construction and engineering ( ICE)

ImpecinaImpecina

Impecina is a private firm and largest construction company in Peru Impecina is a private firm and largest construction company in Peru and operates throughout Latin America.and operates throughout Latin America.

It has broad range of interests including residential and commercial It has broad range of interests including residential and commercial buildings, hydraulic works, transportation and maritime works.buildings, hydraulic works, transportation and maritime works.

It employs several thousand personnel, engineers and technicians, It employs several thousand personnel, engineers and technicians, its sales had doubled in the last five years.its sales had doubled in the last five years.

It was still primarily a Peruvian business with most turnover in Peru, It was still primarily a Peruvian business with most turnover in Peru, but was in the expanding into Colombia, the north African but was in the expanding into Colombia, the north African Mediterranean countries, Argentina, Brazil and Venezuela Mediterranean countries, Argentina, Brazil and Venezuela

Licensing as an entry modeLicensing as an entry mode

Licensing is a nonexport entry modeLicensing is a nonexport entry mode Licensing is a cross between export and direct Licensing is a cross between export and direct

investmentinvestment The licensor is exporting whatever the agreement is The licensor is exporting whatever the agreement is

concerned withconcerned with At the same time it is an investment which will give them At the same time it is an investment which will give them

future cash inflowfuture cash inflow

The licensing package for ImpecinaThe licensing package for Impecina

*Luostarinen og Welch(1990)*Luostarinen og Welch(1990)

Technical core.

Technical know how:

Patents

Other supportive components may include:

Copyright

Marketing know-how

Managerial know how

Trademark

Design

StrengthsStrengths

Well established corp.Well established corp. DiversifiedDiversified Developed reputationDeveloped reputation Experienced in licensingExperienced in licensing Technologically advancedTechnologically advanced

WeaknessesWeaknesses

Few and far between innovationsFew and far between innovations Avoidance of patenting outside USAvoidance of patenting outside US Insufficient license agreementInsufficient license agreement

OpportunitiesOpportunities

Expanding marketExpanding market Impecina is a considerable actor in the Impecina is a considerable actor in the

Peruvian marketPeruvian market Patenting outside USPatenting outside US Cooperation with Impecina in other Cooperation with Impecina in other

countriescountries

ThreatsThreats

Cultural differencesCultural differences Peruvian governmental regulationsPeruvian governmental regulations Competition from other US companiesCompetition from other US companies Impecina can copy/steal Metros Impecina can copy/steal Metros

technologytechnology

Metro Corporation: Technology Metro Corporation: Technology Licensing NegotiationLicensing Negotiation

Metro Corp. Impecina Licensing agreement

Licensor Licensee

Metro Corporation give Impecina the right to use their name and petroleum tank technology in exchange for an initial payment and 2 % royalties.

Metro’s BenefitsMetro’s Benefits

Licensing

Relationship

Development

Other joint operation possibilities

Renewed/enchanced licensing agreement

Feedback/market knowledge

Effective technology transfer

Action PlanAction Plan

Possible actionsPossible actions Accept formal offerAccept formal offer Reopen negotiationReopen negotiation End negotiationEnd negotiation

Critical Success FactorsCritical Success Factors

Cultural understandingCultural understanding Make sure Impecina does not become a Make sure Impecina does not become a

competitor, due to lack of control over competitor, due to lack of control over production & marketingproduction & marketing

Understand reasons for government Understand reasons for government interventionintervention

Technology innovation based on market Technology innovation based on market developmentdevelopment

The final agreement – active involvementThe final agreement – active involvement Negotiation techniqueNegotiation technique

Short Term GoalsShort Term Goals

Secure patents outside USSecure patents outside US To make sure that the license agreement To make sure that the license agreement

operate successfullyoperate successfully To provide Impecina with all the technical To provide Impecina with all the technical

training and resources (know-how) they training and resources (know-how) they need to be successful for Metroneed to be successful for Metro

To develop a good relationship with To develop a good relationship with ImpecinaImpecina

Long Term GoalsLong Term Goals

A long term profitable A long term profitable cooperationcooperation Gain of tactical and strategic advantages Gain of tactical and strategic advantages

related to expansion in foreign marketsrelated to expansion in foreign markets Using the licensing agreement as a Using the licensing agreement as a

steppingstone strategysteppingstone strategy To recognize and act upon opportunitiesTo recognize and act upon opportunities

ConclusionConclusion

Preserving patents is a key issuePreserving patents is a key issue If the cooperation is to be successful, we If the cooperation is to be successful, we

recommend that the agreement is recommend that the agreement is renegotiated in accordance with the renegotiated in accordance with the action plan action plan