Foreign Licensing with Legal Translation Services Companies

Although about one in ten U.S. firms is currently engaged in international marketing, thousands of other potentially successful international firms continue to operate as simply domestic producers and marketers.  Firms interested in marketing their products abroad may choose from among four basic entry strategies.  While all four strategies are of interest to translation services workers, this article focuses on foreign licensing agreements.

Foreign licensing is an agreement in which a firm permits a foreign company to produce and distribute its merchandise or use its trademark, patent or processes in a specified geographical area.  These agreements often demand the services of Legal Translation workers before any contracts are signed and the use of translation services workers for ongoing communication between the parties.  Translation workers are also used in the production of advertising collateral and other support materials as needed.

As one Jacksonville Translation Services worker indicated, “Licensing offers several advantages over exporting, including availability of local marketing information and distribution channels and protection from various legal barriers.”  Because licensing does not require a capital outlay, it is an attractive entry method for many firms, especially small ones.

A firm that maintains a separate marketing or selling operation in a foreign country is involved in overseas marketing.  Examples are foreign sales offices and overseas marketing subsidiaries.  The product may be produced by domestic factories, foreign licensees or contract manufacturers, but the company always directly controls foreign sales.

Foreign production and foreign marketing, the ultimate degree of company involvement in the international market arena, may be performed in one of the following ways.

  1. The firm may set up its own production and marketing operation in the foreign country.
  2. The firm may acquire an existing firm in the country in which it wants to do business.
  3. The firm may form a joint venture, in which it shares the risks, costs and management of the foreign operation with one or more partners who are usually nationals of the host country.

In recent years, several U.S. firms have formed joint ventures in China and the Soviet Union.  Kentucky Fried Chicken International opened the first fast food restaurant in China through a joint venture with Beijing Travel and Tourism Corporation and Beijing Corporation of Animal Products Processing Industry and Commerce.     As you can imagine, this increase has led to the need for strong language translator and interpreters.