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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